# In the matter of Shyam Digital Communications Pvt. Ltd. CA No. 735-C-III-ND-19 in IB 688-ND-2019

> NCLT judgment dated 2019-10-16. Citation: TCN-2019-NCLT-00969. The case involves M/s. Earthcon Promoters Ltd. as the petitioner and M/s. Shyam Digital…

- **Court:** NCLT
- **Order date:** 16 Oct 2019
- **Citation:** TCN-2019-NCLT-00969
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shyam-digital-communications-pvt-ltd-ca-no-735-c-iii-nd-19-in-ib-688-nd-2019-f4e7a65c

## Summary

### Background

The case involves M/s. Earthcon Promoters Ltd. as the petitioner and M/s. Shyam Digital Communications Pvt. Ltd. as the respondent. The matter pertains to Section 9 of the IBC 2016. The Resolution Professional filed an application under Section 12A, supported by a resolution passed by the Committee of Creditors (CoC) in its meeting on October 1, 2019. The CoC approved the recall of the Corporate Insolvency Resolution Process (CIRP) with 100% voting share.

## Facts

M/s. Earthcon Promoters Ltd. initiated proceedings against M/s. Shyam Digital Communications Pvt. Ltd. under Section 9 of the IBC 2016. The Resolution Professional filed an application under Section 12A, supported by the CoC's resolution passed on October 1, 2019, to recall the CIRP. The CoC's decision to recall the CIRP was supported by 100% voting share. The Operational Creditor agreed to withdraw the original petition after receiving three cheques, with one cheque already realized. The CIRP was initiated on September 3, 2019. The Resolution Professional also filed Form-FA. The two Financial Creditors are Canara Bank and Bank of Baroda.

## Issues and analysis

### Issue 1: Whether the application under Section 12A of the IBC, seeking to withdraw the CIRP, should be …

**Ratio:** Section 12A of the IBC allows for the withdrawal of CIRP with the approval of 90% voting

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**Reasoning:** The CoC approved the recall of the CIRP with 100% voting share, indicating overwhelming

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**Interpretation:** Section 12A provides a mechanism for withdrawing CIRP if a substantial majority

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**Application:** Since the CoC approved the withdrawal with 100% voting share and the

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## Parties

- **Judges:** Ch. Mohd Sharief…; K.K. V…
- **Appellants:** M/s. Earthcon…
- **Respondents:** M/s Shyam Digital…

## Timeline

- **2019-10-01 — CoC Meet…**: The Committee of Creditors (CoC) held a meeting and passed a resolution supporting the…
- **2019-09-03 — CIRP Init…**: The Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Shyam…

## 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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