# In the matter of Neelkantham Systems Pvt. Ltd. MA No. 199-CTB-2019 in CP (IB) No. 105-CTB-2019

> NCLT judgment dated 2020-01-03. Citation: TCN-2020-NCLT-02559. The Operational Creditor filed MA No. 199/CTB/2019, seeking termination of the Corporate…

- **Court:** NCLT
- **Order date:** 3 Jan 2020
- **Citation:** TCN-2020-NCLT-02559
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/neelkantham-systems-pvt-ltd-ma-no-199-ctb-2019-in-cp-ib-no-105-ctb-2019-eefe991c

## Summary

### Background

The Operational Creditor filed MA No. 199/CTB/2019, seeking termination of the Corporate Insolvency Resolution (CIR) process, which was initiated on 19.11.2019. The Operational Creditor stated that they had received the entire amount as per their claim and sought permission from the Adjudicating Authority to withdraw the application. The IRP appointed by the Adjudicating Authority was not present, and the Operational Creditor submitted that no Committee of Creditors (COC) had been constituted. The Operational Creditor agreed to settle the dues to the IRP, if any. The case relied on the decision of the Hon'ble Apex Court in the matter of 'Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors.', W.P.(C) 99/2018, which allows for the termination of the CIR

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## Facts

The Operational Creditor filed MA No. 199/CTB/2019 seeking termination of the CIR process. The CIR process was initiated on 19.11.2019. The Operational Creditor received the entire amount as per their claim. The IRP was not present before the Adjudicating Authority. No COC had been constituted. The Operational Creditor agreed to settle the dues to the IRP. The case relied on the decision of the Hon'ble Apex Court in the matter of 'Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors.', W.P.(C) 99/2018. The Corporate Debtor was released from the rigours of the moratorium and is permitted to function through its own board. The Operational Creditor has undertaken to reimburse the IRP's expenses and professional fees within two weeks from today. The next date of

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## Issues and analysis

### Issue 1: Whether the CIR process can be terminated prior to the constitution of the COC when a compromise is …

**Ratio:** The CIR process can be terminated prior to the constitution of the COC on a compromise

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**Reasoning:** The court relied on the precedent set by the Supreme Court in the 'Swiss Ribbons' case,

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**Interpretation:** This interpretation allows for flexibility in the CIR process, enabling parties

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**Application:** In this case, the Operational Creditor received the entire amount as per their

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## Parties

- **Judges:** Sucharitha…; Satya Ranjan…
- **Respondents:** Neelkantham…

## Timeline

- **2019-11-19 — Initiation of CIR…**: The CIR process was initiated based on the admission of the Operational Creditor's…
- **2020-01-03 — Hearing…**: Hearing on MA No. 199/CTB/2019, filed by the Operational Creditor seeking termination of…

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