# In the matter of SBM Paper Mills Ltd. M.A. 827,828,1142 &1396-2018 in C.P. (IB)-1362(MB)-2017

> NCLT judgment dated 2018-12-20. Citation: TCN-2018-NCLT-00033. The case involves multiple Miscellaneous Applications (MAs) filed in relation to the Corporate…

- **Court:** NCLT
- **Order date:** 20 Dec 2018
- **Citation:** TCN-2018-NCLT-00033
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sbm-paper-mills-ltd-ma-8278281142-1396-2018-in-cp-ib-1362mb-2017-11e5bf4e

## Summary

### Background

The case involves multiple Miscellaneous Applications (MAs) filed in relation to the Corporate Insolvency Resolution Process (CIRP) of SBM Paper Mills Ltd. The primary MA, 1396/2018, was filed by Satyanarayan Malu, a director of the suspended board, seeking withdrawal of the initial application under Section 10 of the IBC. This request was based on a proposed One Time Settlement (OTS) with Allahabad Bank, the sole financial creditor. Another MA, 827/2018, was filed by the Resolution Professional (RP) seeking approval of a resolution plan submitted by Khandesh Roller Floor Mills. MA 1142/2018 was filed by Khandesh Roller Floor Mills seeking to withdraw its resolution plan. The NCLT considered these applications together to resolve the controversies.

## Facts

SBM Paper Mills Ltd. underwent CIRP after filing an application under Section 10 of the IBC, which was admitted on 2017-10-17. Allahabad Bank was the sole financial creditor and member of the Committee of Creditors (CoC). An advertisement was issued inviting Expression of Interest (EoI), and seven entities expressed interest. Khandesh Roller Floor Mills submitted a resolution plan that was approved by the CoC. Satyanarayan Malu, a director of SBM Paper Mills, proposed a One Time Settlement (OTS) with Allahabad Bank, offering a higher amount than the resolution plan. Allahabad Bank agreed to the OTS and consented to the withdrawal of the CIRP application. Khandesh Roller Floor Mills then sought to withdraw its resolution plan. The Resolution Professional had submitted

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## Issues and analysis

### Issue 1: Whether an Applicant who has filed a petition u/s 10 is entitled to withdraw its own petition u/s …

**Ratio:** Section 12A of the IBC allows the Adjudicating Authority to permit withdrawal of an

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**Reasoning:** The NCLT reasoned that while it might seem unusual for an applicant who initially filed

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**Interpretation:** Section 12A provides a mechanism for withdrawal of CIRP applications, balancing

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**Application:** In this case, the applicant, Satyanarayan Malu, was a director of SBM Paper

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Satyanaraya…
- **Respondents:** SBM Paper Mills…; Ashish…
- **Advocates:** Amir Ars…; Zaid Ma…; +7 more

## Timeline

- **2017-10-17 — Admission of Section 10…**: Application under Section 10 of the Insolvency Code filed by SBM Paper Mills was…
- **2018-06-11 — Resolution Plan…**: Resolution plan of Khandesh…

## 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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