# In the matter of Prostar Textile Mill Pvt. Ltd. MA-63 & 64-(CHE)-2021 in CP(IB)-160-CHE-2020

> NCLT judgment dated 2021-06-03. Citation: TCN-2021-NCLT-02033. The case involves an application (MA/63/(CHE)/2021) filed by the Interim Resolution…

- **Court:** NCLT
- **Order date:** 3 Jun 2021
- **Citation:** TCN-2021-NCLT-02033
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/prostar-textile-mill-pvt-ltd-ma-63-64-che-2021-in-cpib-160-che-2020-73282a07

## Summary

### Background

The case involves an application (MA/63/(CHE)/2021) filed by the Interim Resolution Professional (IRP) appointed by the National Company Law Tribunal (NCLT) pursuant to an order initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor on 28.01.2021. The IRP sought to initiate the CIRP. A related application (MA/64/(CHE)/2021) seeking the listing of MA/63/(CHE)/2021 became infructuous as MA/63/(CHE)/2021 was listed. The advocate for the applicant stated that no Committee of Creditors (CoC) had been constituted. The applicant complied with the Insolvency & Bankruptcy Code, 2016 by publishing a paper publication calling for claims after receiving the order copy on 15.03.2021, with publication done on 18.03.2021.

## Facts

The Interim Resolution Professional (IRP) filed an application (MA/63/(CHE)/2021) to initiate the Corporate Insolvency Resolution Process (CIRP) against Prostar Textile Mill Pvt Ltd. An earlier order was passed on 28.01.2021 initiating the CIRP. The IRP complied with the requirement to publish a notice calling for claims, with the publication occurring on 18.03.2021, following the receipt of the order copy on 15.03.2021. Only four claims were received from Operational Creditors, and none from Financial Creditors, with the last date for claims fixed on 15.04.2021. No Committee of Creditors (CoC) was constituted. A settlement agreement was reached between the parties on 31.03.2021. The Operational Creditor forwarded Form FA to the IRP on 05.04.2021, which was received on

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## Issues and analysis

### Issue 1: Whether the application MA/63/(CHE)/2021 should be allowed, leading to the withdrawal of the CIRP …

**Ratio:** Section 12A of the Insolvency & Bankruptcy Code, 2016, read with Regulation 30A of

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**Reasoning:** The court considered the settlement agreement between the parties and the Operational

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

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**Application:** The court applied Section 12A and Regulation 30A to the facts of the case,

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** S. Subram…
- **Respondents:** Prostar Textile…

## Timeline

- **2021-01-28 — CIRP Init…**: Order passed by the Tribunal initiating…
- **2021-03-15 — Receipt of Or…**: The Applicant/IRP received a copy of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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