# In the matter of Karan Automotive Pvt. Ltd.

> NCLT judgment dated 2023-09-19. Citation: TCN-2023-NCLT-01549. The case involves an application filed under Section 12A of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Sept 2023
- **Citation:** TCN-2023-NCLT-01549
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karan-automotive-pvt-ltd-04eb656b

## Summary

### Background

The case involves an application filed under Section 12A of the Insolvency & Bankruptcy Code, 2016, seeking withdrawal of the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The application is based on a settlement between the parties. The applicant seeks to withdraw/terminate the CIRP in view of Section 12A of the Insolvency & Bankruptcy Code, 2016, read with Regulation 30A(1)(b) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and Rule 11 of National Company Law Tribunal Rules, 2016, in terms of the settlement agreement.

## Facts

Bhushan Power & Steel Ltd. initiated a Corporate Insolvency Resolution Process (CIRP) against Karan Automotives Pvt. Ltd. An application, IA No. 4965/ND/2023, was filed under Section 12A of the Insolvency & Bankruptcy Code, 2016, seeking withdrawal of the CIRP based on a settlement between the parties. The application was supported by Regulation 30A(1)(b) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and Rule 11 of National Company Law Tribunal Rules, 2016. During the IInd CoC Meeting held on 16.09.2023, the sole member who is Operational Creditor approved withdrawal of CP-IB No. 238/2022 filed against the M/s Karan Automotive Private Limited on account of settlement between the

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can permit the withdrawal of the Corporate Insolvency Resolution …

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

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**Reasoning:** The court considered the submissions made by the Learned Counsel for the applicant and

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**Interpretation:** Section 12A provides a mechanism for parties to settle their disputes and

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**Application:** In this case, the application for withdrawal was based on a settlement between

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## Parties

- **Judges:** MANNI SANKARIAH…; BINOD KUMAR…
- **Appellants:** BHUSHAN POWER AND…
- **Respondents:** Karan Automotives…
- **Advocates:** Rakesh…; Mr Ankit…; +1 more

## Timeline

- **2023-09-16 — IInd CoC M…**: The IInd CoC Meeting was held, during which the sole member who is Operational Creditor…
- **2023-09-19 — Order Del…**: The order was delivered on 19.09.2023, allowing the withdrawal of IB/238/ND/2022 and…

## 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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