# In the matter of Karan Automotive Pvt. Ltd.

> NCLT judgment dated 2023-09-19. Citation: TCN-2023-NCLT-01555. 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-01555
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karan-automotive-pvt-ltd-52fa6e61

## 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 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. The applicant seeks to withdraw/terminate the CIRP in view of a settlement.

## Facts

Bhushan Power & Steel Ltd. initiated a Corporate Insolvency Resolution Process (CIRP) against Karan Automotives Pvt. Ltd. An application was filed under Section 12A of the Insolvency & Bankruptcy Code, 2016, seeking to withdraw 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 the withdrawal of CP-IB No. 238/2022. The settlement agreement between the parties was placed on record. The applicant requested the withdrawal/termination

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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 court considered the submissions made by the Learned Counsel for the applicant and

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**Interpretation:** Section 12A provides a mechanism for withdrawing CIRP if certain conditions are

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**Application:** In this case, the parties reached a settlement, and the sole member who is

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## Parties

- **Judges:** MANNI SANKARIAH…; BINOD KUMAR…
- **Appellants:** BHUSHAN POWER AND…
- **Respondents:** Karan Automotives…

## Timeline

- **2023-09-16 — IInd CoC M…**: The IInd CoC Meeting was held, during which the sole member who is Operational Creditor…
- **2023-09-16 — Agreement…**: Agreement dated 16.09.2023 and minutes 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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