# In the matter of LRM Spices Pvt. Ltd. IA-2524-2022 in IB-686(ND)-2020

> NCLT judgment dated 2022-05-31. Citation: TCN-2022-NCLT-02520. The case involves an application for withdrawal of a company petition under section 12A of the…

- **Court:** NCLT
- **Order date:** 31 May 2022
- **Citation:** TCN-2022-NCLT-02520
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lrm-spices-pvt-ltd-ia-2524-2022-in-ib-686nd-2020-836a5bda

## Summary

### Background

The case involves an application for withdrawal of a company petition under section 12A of the Insolvency and Bankruptcy Code, 2016, read with Regulation 30A(3) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution process for corporate persons) Regulations, 2016. The application was filed due to a settlement reached between M/s. Sahni International (Operational Creditor) and LRM Spices Pvt. Ltd. (Corporate Debtor).

## Facts

M/s. Sahni International initiated insolvency proceedings against LRM Spices Pvt. Ltd. under Section 9 of the IBC, 2016. Subsequently, the parties reached a settlement where LRM Spices Pvt. Ltd. agreed to pay Rs. 32 Lakhs to M/s. Sahni International. This amount was paid via two demand drafts of Rs. 16 Lakhs each, and the receipt was acknowledged by the Operational Creditor. Additionally, Rs. 2 Lakhs was paid towards the IRP's costs and expenses. Based on this settlement, an application was filed under Section 12A of the I&B Code, 2016, to withdraw the company petition. The Interim Resolution Professional (IRP), Satish Kumar Chugh, confirmed the receipt of the settlement amount and fees. The relevance of these facts lies in demonstrating that the settlement was

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## Issues and analysis

### Issue 1: Whether the application for withdrawal of the company petition under Section 12A of the I&B …

**Ratio:** Section 12A of the I&B Code, 2016, allows for the withdrawal of an application

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**Reasoning:** The court considered the settlement agreement between the parties, the payment of the

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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 court applied Section 12A and Regulation 30A(3) to allow the

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## Parties

- **Judges:** BACHU VENKAT…; NARNEDER KUMAR…
- **Appellants:** M/s. Sahni…
- **Respondents:** LRM Spices Pvt.…
- **Advocates:** Vishal…; Tanya H…; +1 more

## Timeline

- **2022-05-18 — Settlement Agreement…**: Settlement Agreement was dated…
- **2022-05-18 — Demand Draf…**: Two Demand Drafts dated 18.5.2022…

## 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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