# In the matter of Vasava Engineering Pvt. Ltd. IA 120-CTB-2019 in CP (IB) No. 50-CTB-2019

> NCLT judgment dated 2019-10-04. Citation: TCN-2019-NCLT-01092. The case involves an application for the termination of the Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 4 Oct 2019
- **Citation:** TCN-2019-NCLT-01092
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vasava-engineering-pvt-ltd-ia-120-ctb-2019-in-cp-ib-no-50-ctb-2019-0298c843

## Summary

### Background

The case involves an application for the termination of the Corporate Insolvency Resolution Process (CIRP) initiated against M/S MT & T Rentals Ltd. The CIRP was initiated on 27.09.2019 following the admission of a petition by the Operational Creditor. The parties have reached a settlement, and the Operational Creditor has received the agreed-upon amount. The Operational Creditor seeks permission from the Adjudicating Authority to withdraw the application.

## Facts

M/S MT & T Rentals Ltd. was undergoing CIRP initiated on 2019-09-27. The Operational Creditor filed a petition for the initiation of CIRP, which was admitted. Subsequently, the Operational Creditor and the Corporate Debtor reached a settlement, documented in a deed of settlement dated 2019-10-03. The Operational Creditor received the entire settlement amount. The IRP appointed by the Adjudicating Authority was not present during the hearing. No Committee of Creditors (COC) had been constituted. The Operational Creditor sought to withdraw the application for CIRP. The Operational Creditor undertook to reimburse the IRP's expenses and professional fees within two weeks.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can allow the withdrawal of the application for CIRP based on a …

**Ratio:** The CIRP can be terminated prior to the constitution of the COC on a compromise being

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**Reasoning:** The court relied on the precedent set by the Hon'ble Apex Court in the Swiss Ribbons

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**Interpretation:** The 'Swiss Ribbons' judgment provides a legal basis for terminating CIRP

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

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## Parties

- **Judges:** Sucharit…; Satya Ranjan…
- **Respondents:** M/S MT & T…; Sujit…
- **Advocates:** Rakesh Kumar…; Jasmeet…; +1 more

## Timeline

- **2019-09-27 — CIRP Init…**: CIRP initiated against M/S MT & T Rentals Ltd. following the admission of the Operational…
- **2019-10-03 — Settlement Ag…**: The Operational Creditor and the Corporate Debtor reached a settlement, documented in a…

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