# In the matter of U. P. State Spinning Company Ltd. IA No. 136-2020 in CP No. (IB) 335-ALD-2018

> NCLT judgment dated 2020-06-25. Citation: TCN-2020-NCLT-01116. The case involves an application for withdrawal of the Corporate Insolvency Resolution Process…

- **Court:** NCLT
- **Order date:** 25 Jun 2020
- **Citation:** TCN-2020-NCLT-01116
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/u-p-state-spinning-company-ltd-ia-no-136-2020-in-cp-no-ib-335-ald-2018-a0e396ea

## Summary

### Background

The case involves an application for withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated against U.P. State Spinning Company Ltd. The applicant, initially appointed as Interim Resolution Professional and later as Resolution Professional, initiated the CIRP. During the CIRP, an Expression of Interest was invited but no responses were received. The Respondent requested a settlement with the sole Financial Creditor, Union Bank of India, which held 100% voting shares in the Committee of Creditors (CoC). A settlement was reached, and the Financial Creditor agreed to withdraw the CIRP. The matter was placed before the CoC, which approved the withdrawal with a 100% voting share. A formal application for withdrawal was filed, along with a bank guarantee.

## Facts

The Union Bank of India initiated CIRP against U.P. State Spinning Company Ltd. An Interim Resolution Professional was appointed on 2019-10-22, and later became the Resolution Professional. During the CIRP, no Expression of Interest was received. The Corporate Debtor requested a settlement with the Union Bank of India, the sole Financial Creditor holding 100% voting shares in the CoC. A settlement was reached where the Financial Creditor received Rs. 4,44,76,386/- out of an admitted claim of Rs. 4,96,04,846/-. The CoC approved the withdrawal of CIRP with 100% voting share on 2020-02-03. A formal application for withdrawal was filed on 2020-02-28, along with a bank guarantee of Rs. 20.00 Lac. The Respondent had previously filed a Company Appeal (AT) before the NCLAT,

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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, read with Regulation 30A, allows for the withdrawal of CIRP with

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**Reasoning:** The court reasoned that the settlement between the Financial Creditor and the Corporate

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**Interpretation:** Section 12A and Regulation 30A are interpreted to facilitate settlements

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

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** Union Bank of…
- **Respondents:** U.P. STATE…

## Timeline

- **2019-10-22 — Appointment of Interim…**: The applicant was appointed as…
- **2019-12-30 — Appointment as…**: The applicant was appointed as Resolution…

## 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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