# In the matter of Karan Automotive Pvt. Ltd.

> NCLT judgment dated 2023-09-19. Citation: TCN-2023-NCLT-01535. 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-01535
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karan-automotive-pvt-ltd-2f8867fa

## Summary

### Background

The case involves an application filed under Section 12A of the Insolvency & Bankruptcy Code, 2016, seeking the withdrawal of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The application is 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, based on a settlement between the parties. The initial Company Petition was CP-IB No. 238/2022.

## Facts

Bhushan Power & Steel Ltd. filed an application (IA No. 4965/ND/2023) under Section 12A of the Insolvency & Bankruptcy Code, 2016, seeking to withdraw the Corporate Insolvency Resolution Process (CIRP) initiated against Karan Automotives Pvt. Ltd. The application was based on a settlement reached between the parties. The IInd CoC Meeting held on 16.09.2023 approved the withdrawal of CP-IB No. 238/2022, which was filed against Karan Automotive Private Limited. The sole member, an Operational Creditor, approved the withdrawal. The settlement agreement (Form 'FA') was placed on record. The Adjudicating Authority considered the submissions and prayers, ultimately permitting the withdrawal of IB/238/ND/2022. Consequently, the Corporate Debtor was released from 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, read with Regulation 30A(1)(b)

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**Reasoning:** The Adjudicating Authority considered the submissions made by the Learned Counsel for the

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**Interpretation:** Section 12A provides a mechanism for withdrawing CIRP when a settlement is

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**Application:** In this case, the application was filed under Section 12A, supported by

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## Parties

- **Judges:** MANNI SANKARIAH…; BINOD KUMAR…
- **Appellants:** Bhushan Power and…
- **Respondents:** Karan Automotives…

## Timeline

- **2022-01-01 — Initial Company…**: CP-IB No. 238/2022 was filed against…
- **2023-09-16 — IInd CoC M…**: The IInd CoC Meeting was held, and the…

## 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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