# In the matter of Akshar Fabrics Pvt. Ltd.

> NCLT judgment dated 2023-10-06. Citation: TCN-2023-NCLT-01368. This case involves a petition filed under Section 12A of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 6 Oct 2023
- **Citation:** TCN-2023-NCLT-01368
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/akshar-fabrics-pvt-ltd-4ccfcc6b

## Summary

### Background

This case involves a petition filed under Section 12A of the Insolvency and Bankruptcy Code, 2016, read with Regulation 30A of the IBBI Regulations. The applicant sought to withdraw the main petition bearing number CP(16)/331/(AHM)/2022. The Corporate Insolvency Resolution Process (CIRP) had commenced against Akshar Fabrics Pvt Ltd vide order dated 11.09.2023 in Company Petition No. 331 of 2022, filed by Shree Hari Coal Corporation. The applicant was appointed as the Interim Resolution Professional (IRP). A settlement was reached between the applicant and the corporate debtor in the main Company Petition. The IRP confirmed that all fees and expenses had been received.

## Facts

Shree Hari Coal Corporation initiated Corporate Insolvency Resolution Process (CIRP) against Akshar Fabrics Pvt Ltd by filing Company Petition No. 331 of 2022. The CIRP commenced on 2023-09-11. An Interim Resolution Professional (IRP) was appointed. Subsequently, a settlement was reached between Shree Hari Coal Corporation and Akshar Fabrics Pvt Ltd. The IRP confirmed receipt of all fees and expenses. The Committee of Creditors (CoC) had not been constituted. Shree Hari Coal Corporation then filed an application under Section 12A of the Insolvency and Bankruptcy Code, 2016, seeking to withdraw the CIRP. The key fact is the settlement, which allows for the withdrawal of the petition before the CoC is formed.

## Issues and analysis

### Issue 1: Whether the Tribunal should allow the withdrawal of the Company Petition No. 331 of 2022 under …

**Ratio:** Section 12A of the Insolvency and Bankruptcy Code, 2016, allows for the withdrawal of an

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**Reasoning:** The court reasoned that since a settlement was reached between the applicant and the

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**Interpretation:** Section 12A is interpreted to allow for flexibility in cases where the CIRP is

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**Application:** In this case, the court applied the principle of Section 12A by allowing the

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** Shree Hari Coal…
- **Respondents:** Akshar Fabrics…

## Timeline

- **2023-09-11 — CIRP Commen…**: Corporate Insolvency Resolution Process commenced against Akshar Fabrics Pvt Ltd vide…
- **2023-10-06 — Order Del…**: Order delivered allowing the withdrawal of…

## 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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