# In the matter of Starkenn Sports Pvt. Ltd. IA-2096-MB-2020 In CP(IB)-3917-MB-2019

> NCLT judgment dated 2020-11-20. Citation: TCN-2020-NCLT-00229. This case involves an application filed under Section 12A of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 20 Nov 2020
- **Citation:** TCN-2020-NCLT-00229
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/starkenn-sports-pvt-ltd-ia-2096-mb-2020-in-cpib-3917-mb-2019-ac192a01

## Summary

### Background

This case involves an application filed under Section 12A of the Insolvency and Bankruptcy Code (IBC) by the Resolution Professional seeking withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated against the Corporate Debtor under CP No.3917/2019. The Committee of Creditors (CoC) approved the withdrawal in a meeting held on November 7, 2020, after accepting Form FA. The Operational Creditor has entered into consent terms with all the Financial Creditors. The entire cost towards CIRP will be funded from the Corporate Debtor's account.

## Facts

The Resolution Professional filed an application under Section 12A seeking withdrawal of the CIRP initiated under CP No.3917/2019 against the Corporate Debtor. The CoC, consisting of 5 Financial Creditors with a debt of approximately Rs.21 Crores, approved the withdrawal in a meeting on 07.11.2020 after accepting Form FA. The Operational Creditor entered into consent terms with all Financial Creditors. The application to withdraw the CIRP pleaded that furnishing a bank guarantee may be dispensed with, as the Corporate Debtor's account would fund the entire CIRP cost. The Resolution Professional confirmed that the entire CIRP cost had been paid. Several IAs were filed, including IA No.1311/2020 seeking directions of non-cooperation, IA No.1941/2020 concerning

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## Issues and analysis

### Issue 1: Whether the application for withdrawal of the CIRP under Section 12A of the IBC should be allowed, …

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

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**Reasoning:** The court reasoned that the CoC had approved the withdrawal of the CIRP, indicating that

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**Interpretation:** Section 12A is interpreted to facilitate settlements and resolutions outside

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**Application:** In this case, the CoC's approval, coupled with the settlement between the

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## Parties

- **Judges:** Chandra Bha…; SUCHITRA KANUPARTH…; +1 more
- **Appellants:** Rajeev Man…
- **Respondents:** Starkenn Sports…

## Timeline

- **2019-01-01 — Initiation…**: CIRP initiated under CP…
- **2020-11-07 — CoC Meet…**: The CoC accepted Form FA and resolved…

## 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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