# In the matter of Powerforge Engineering Private Limited IA No. 280 & 334-JPR-2020 in CP No. (IB)-151-9-JPR-2019

> NCLT judgment dated 2020-11-10. Citation: TCN-2020-NCLT-00273. The case involves an application filed by the Resolution Professional of Powerforge Engineering…

- **Court:** NCLT
- **Order date:** 10 Nov 2020
- **Citation:** TCN-2020-NCLT-00273
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/powerforge-engineering-private-limited-ia-no-280-334-jpr-2020-in-cp-no-ib-151-9-a87f40b3

## Summary

### Background

The case involves an application filed by the Resolution Professional of Powerforge Engineering Private Limited under Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016, seeking permission to withdraw the Corporate Insolvency Resolution Process (CIRP) initiated against the Corporate Debtor. The CIRP was initiated based on a petition filed under Section 9 of the IBC. The Operational Creditor and the Corporate Debtor have reached a settlement, and the Operational Creditor has filed an application stating that the matter has been settled. The Resolution Professional has also been paid a fee of Rs. 50,000 by the Operational Creditor.

## Facts

BMSS Steel Industries Private Limited initiated CIRP against Powerforge Engineering Private Limited, the Corporate Debtor, under Section 9 of the IBC. CP No. (IB)-151/9/JPR/2019 was admitted on 07.09.2020, and the IRP received the order of admission on 14.09.2020. Subsequently, the Operational Creditor (BMSS Steel Industries Private Limited) and the Corporate Debtor (Powerforge Engineering Private Limited) reached a settlement. The Operational Creditor filed an application in Form No. FA stating the settlement. The Resolution Professional of Powerforge Engineering Private Limited filed IA No. 280/JPR/2020 under Section 12A of IBC read with Regulation 30A of IBBI Regulations, seeking permission to withdraw the CP No. (IB)-151/9/JPR/2019. The Resolution Professional was

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## Issues and analysis

### Issue 1: Whether the application for withdrawal of the Corporate Insolvency Resolution Process (CIRP) under …

**Ratio:** Section 12A of the IBC, 2016, read with Regulation 30A of the IBBI (Insolvency Resolution

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**Reasoning:** The court reasoned that the Operational Creditor and the Corporate Debtor had reached a

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**Interpretation:** Section 12A provides a mechanism for withdrawing CIRP if the parties involved

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**Application:** In this case, the Operational Creditor and the Corporate Debtor reached a

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## Parties

- **Judges:** Ajay Kumar…; RaghuNa…
- **Respondents:** Powerforge…; BMSS Steel…

## Timeline

- **2019-09-01 — CP Filed…**: CP No. (IB)-151/9/JPR/2019…
- **2020-09-07 — CP Admit…**: CP No. (IB)-151/9/JPR/20…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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