# In the matter of Aarti Suitings Pvt. Ltd.

> NCLT judgment dated 2023-03-27. Citation: TCN-2023-NCLT-04043. The case involves an application under Section 12A of the IBC, 2016, for the withdrawal of the…

- **Court:** NCLT
- **Order date:** 27 Mar 2023
- **Citation:** TCN-2023-NCLT-04043
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/aarti-suitings-pvt-ltd-1026b848

## Summary

### Background

The case involves an application under Section 12A of the IBC, 2016, for the withdrawal of the ongoing Corporate Insolvency Resolution Process (CIRP) initiated against M/s Aarti Suitings Private Limited. The CIRP was initiated based on an application under Section 9 of the IBC, 2016. The Committee of Creditors (CoC), holding 97.34% of voting rights, approved the withdrawal of the CIRP.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against M/s Aarti Suitings Private Limited based on an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The CIRP was admitted vide order dated 17.06.2021. Subsequently, an application was filed under Section 12A of the IBC, 2016, seeking the withdrawal of the ongoing CIRP. The Resolution Professional (RP) received Form FA dated 23.01.2023, indicating the intention to withdraw the CIRP. The Committee of Creditors (CoC), holding 97.34% of the voting rights, approved the withdrawal of the CIRP. This approval by a substantial majority of the CoC members is a critical fact influencing the decision to allow the withdrawal.

## Issues and analysis

### Issue 1: Whether the application under Section 12A of the IBC, 2016, for withdrawal of the ongoing CIRP …

**Ratio:** Section 12A of the IBC, 2016, provides a mechanism for the withdrawal of CIRP subject to

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**Reasoning:** The court reasoned that the application for withdrawal was made under Section 12A of the

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**Interpretation:** Section 12A is interpreted to mean that the Adjudicating Authority has the

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**Application:** In this case, the CoC approved the withdrawal with 97.34% voting rights.

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Appellants:** Sangam (India)…
- **Respondents:** Aarti Suitings…

## Timeline

- **2021-06-17 — CIRP Init…**: CIRP initiated against M/s Aarti Suitings…
- **2023-01-23 — Form FA Re…**: RP received Form FA dated 23.01.2023 seeking withdrawal of ongoing Corporate Insolvency…

## 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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