# In the matter of Multicity Digital Consortium Pvt. Ltd. IA(IBC)-777(CHE)2022 in IBA-696-2020

> NCLT judgment dated 2022-08-08. Citation: TCN-2022-NCLT-01427. The application IA(IBC)/777(CHE)/2022 was filed in IBA/696/2020 under Section 12A of the…

- **Court:** NCLT
- **Order date:** 8 Aug 2022
- **Citation:** TCN-2022-NCLT-01427
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/multicity-digital-consortium-pvt-ltd-iaibc-777che2022-in-iba-696-2020-3e111aeb

## Summary

### Background

The application IA(IBC)/777(CHE)/2022 was filed in IBA/696/2020 under Section 12A of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the National Company Law Tribunal Rules, 2016, by the Interim Resolution Professional (IRP) of Multicity Digital Consortium Private Limited (Corporate Debtor) seeking termination of the Corporate Insolvency Resolution Process (CIRP) and withdrawal of the application IBA/696/2020. The CIRP was initiated on 27.06.2022. The IRP issued a public announcement on 30.06.2022 and invited claims from creditors. The suspended directors of the Corporate Debtor engaged in settlement talks with the Operational Creditor and arrived at a compromise. The Applicant had not received any claims from any creditor, and the Committee of Creditors

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## Facts

The Interim Resolution Professional (IRP) of Multicity Digital Consortium Private Limited filed an application (IA(IBC)/777(CHE)/2022) seeking to withdraw the Corporate Insolvency Resolution Process (CIRP) initiated against the Corporate Debtor (IBA/696/2020). The CIRP had commenced on 27.06.2022. The IRP had issued a public announcement inviting claims from creditors. The suspended directors of the Corporate Debtor engaged in settlement talks with the Operational Creditor and reached a compromise. No claims were received from any creditor, and the Committee of Creditors (CoC) was not constituted. A Settlement Agreement dated 11.07.2022 was entered into between the Operational Creditor and the Corporate Debtor. The application for withdrawal was filed under Section 12A

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## Issues and analysis

### Issue 1: Whether the application for withdrawal of the CIRP under Section 12A of the IBC, 2016, should be …

**Ratio:** Section 12A of the IBC, 2016, allows for the withdrawal of an application admitted under

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**Reasoning:** The Tribunal reasoned that since the CoC had not yet been constituted and a settlement

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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 Tribunal applied the principle of allowing withdrawal under

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## Parties

- **Judges:** Ramalingam…; Shri. Samee…
- **Appellants:** Kavitha Surana…
- **Respondents:** Multicity Digital…

## Timeline

- **2022-06-27 — CIRP Commen…**: CIRP was ordered in respect…
- **2022-06-30 — Public Annou…**: IRP issued public announcement in Form-A in 'Business Standard' and 'Makkal Kural'…

## 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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