# In the matter of Nirmal Lifestyle Limited I.A. 2938-2021 in C.P.(IB)-4412(MB)-2019

> NCLT judgment dated 2022-02-09. Citation: TCN-2022-NCLT-04210. The case involves an application (I.A. 2938/2021) filed by the Interim Resolution Professional…

- **Court:** NCLT
- **Order date:** 9 Feb 2022
- **Citation:** TCN-2022-NCLT-04210
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nirmal-lifestyle-limited-ia-2938-2021-in-cpib-4412mb-2019-167c556c

## Summary

### Background

The case involves an application (I.A. 2938/2021) filed by the Interim Resolution Professional (IRP) under Section 12A of the Insolvency and Bankruptcy Code (IBC) for the withdrawal of the Corporate Insolvency Resolution Process (CIRP) order dated August 5, 2021, which was passed against the Corporate Debtor, Nirmal Lifestyle Limited. The withdrawal is sought due to a settlement reached between the Financial Creditor, IDBI Trusteeship Services Limited, and the Corporate Debtor, evidenced by separate consent terms. The IRP states that no Committee of Creditors (COC) has been constituted because of a stay granted by the NCLAT. The IRP has received their fees and expenses and requests the application be allowed.

## Facts

On August 5, 2021, a CIRP order was passed against Nirmal Lifestyle Limited. IDBI Trusteeship Services Limited, the Financial Creditor, and Nirmal Lifestyle Limited, the Corporate Debtor, reached a settlement. The IRP filed I.A. 2938/2021 under Section 12A of the IBC to withdraw the CIRP order. No COC was formed due to a stay by NCLAT. The IRP received fees and expenses. SREI Equipment Finance Limited, a Secured Financial Creditor, opposed the withdrawal, citing a pending Company Petition (CP No. 8091/2021). Individual home buyers represented by Mr. Suri Shikhil Shiv also opposed the withdrawal, claiming dues of around 5 crores. The court considered the settlement between the Financial Creditor and the Corporate Debtor.

## Issues and analysis

### Issue 1: Whether the application for withdrawal of the CIRP order should be allowed given the settlement …

**Ratio:** Section 12A of the Insolvency and Bankruptcy Code (IBC) allows for the withdrawal of CIRP

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**Reasoning:** The court reasoned that the Corporate Debtor had entered into a settlement with the

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

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**Application:** The court applied Section 12A to the facts, noting the settlement between IDBI

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## Parties

- **Judges:** H.V. Subb…; Chandra Bha…
- **Respondents:** Nirmal Lifestyle…

## Timeline

- **2021-08-05 — CIRP Ord…**: CIRP order passed against the Corporate…
- **2022-02-09 — Order Da…**: NCLT allows the IRP's application…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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