# In the matter of Mohan Jute Mills Limited IA No.445-KB-2021 in CP (IB) No.393-KB-2019

> NCLT judgment dated 2021-05-07. Citation: TCN-2021-NCLT-02183. The case involves an application filed by Asset Reconstruction Company (India) Limited, the…

- **Court:** NCLT
- **Order date:** 7 May 2021
- **Citation:** TCN-2021-NCLT-02183
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mohan-jute-mills-limited-ia-no445-kb-2021-in-cp-ib-no393-kb-2019-7989fc14

## Summary

### Background

The case involves an application filed by Asset Reconstruction Company (India) Limited, the Financial Creditor, through the Resolution Professional (RP) of Mohan Jute Mills Limited, the Corporate Debtor, seeking the disposal of the underlying Company Petition bearing CP No.393/KB/2019. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 21.10.2019, following an application under section 7 of the Insolvency and Bankruptcy Code, 2016. During the CIRP, resolution plans were considered by the Committee of Creditors (CoC). Simultaneously, the suspended board of directors challenged the admission of the Corporate Debtor into CIRP before the NCLAT, which was dismissed on 26.03.2021. Subsequently, a settlement proposal was received

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## Facts

Asset Reconstruction Company (India) Limited, the Financial Creditor, initiated Corporate Insolvency Resolution Process (CIRP) against Mohan Jute Mills Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The CIRP was initiated vide order dated 21.10.2019. Mr. Kamal Nayan Jain was appointed as the Resolution Professional (RP). During the CIRP, resolution plans were considered by the Committee of Creditors (CoC). The suspended board of directors challenged the CIRP admission order before the NCLAT, which was dismissed on 26.03.2021. A settlement proposal was received from the suspended board of directors, leading to negotiations. The CoC approved the withdrawal of the underlying Company Petition with 100% votes. A sum of ₹ 18.92

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can allow the withdrawal of an application admitted under …

**Ratio:** Section 12A of the Insolvency and Bankruptcy Code, 2016, allows the Adjudicating

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**Reasoning:** The court considered the provisions of Section 12A of the Code, which explicitly provides

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**Interpretation:** Section 12A provides a mechanism for settling disputes and withdrawing CIRP

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**Application:** In this case, the CoC approved the withdrawal with 100% votes, exceeding the

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Respondents:** Mohan Jute Mills…

## Timeline

- **2019-10-21 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) was initiated against Mohan Jute Mills…
- **2021-03-26 — NCLAT Appeal D…**: The Hon'ble NCLAT dismissed the appeal challenging the admission of the Corporate Debtor…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12A — (1) Subject to sub](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12a)

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