# In the matter of VHM Industries Limited I.A. 2334-2022 in C.P.(IB)-15(MB)-2022

> NCLT judgment dated 2022-08-29. Citation: TCN-2022-NCLT-01236. The application I.A. 2334/2022 was filed by the Interim Resolution Professional (IRP), Mr.…

- **Court:** NCLT
- **Order date:** 29 Aug 2022
- **Citation:** TCN-2022-NCLT-01236
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vhm-industries-limited-ia-2334-2022-in-cpib-15mb-2022-115f1a45

## Summary

### Background

The application I.A. 2334/2022 was filed by the Interim Resolution Professional (IRP), Mr. Hirachand Nemichand Bafna, under Section 12A of the Insolvency and Bankruptcy Code (IBC) for withdrawing the Corporate Insolvency Resolution Process (CIRP) in the main Company Petition bearing No. 15 of 2022. This withdrawal is based on a settlement reached between the Operational Creditor and the Corporate Debtor. The Operational Creditor and the Corporate Debtor amicably settled the matter by entering into a separate settlement agreement dated 22.08.2022, involving a payment of Rs. 1,50,09,324/- in lieu of the full and final settlement of the petition. The Corporate Debtor agreed to pay Rs. 20,00,000/- upon execution of the settlement agreement and the remaining Rs.

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## Facts

The Interim Resolution Professional (IRP), Mr. Hirachand Nemichand Bafna, filed an application (I.A. 2334/2022) to withdraw the Corporate Insolvency Resolution Process (CIRP) against VHM Industries Limited. This application was made under Section 12A of the Insolvency and Bankruptcy Code (IBC). The basis for the withdrawal was a settlement agreement reached between Power2SME Private Limited (Operational Creditor) and VHM Industries Limited (Corporate Debtor). The settlement agreement, dated 22.08.2022, involved a payment of Rs. 1,50,09,324/- from the Corporate Debtor to the Operational Creditor in full and final settlement of the claim. The Corporate Debtor agreed to pay Rs. 20,00,000/- upon execution of the settlement agreement and the remaining Rs. 1,30,09,324/- in

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## Issues and analysis

### Issue 1: Whether the application for withdrawal of the CIRP under Section 12A of the IBC, based on a …

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

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**Reasoning:** The court considered the submissions made by the IRP, the settlement agreement between

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**Interpretation:** Section 12A provides a mechanism for parties to resolve their disputes amicably

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**Application:** In this case, the Operational Creditor and the Corporate Debtor reached a

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## Parties

- **Judges:** P. Moha…; ANURADHA SANJAY…
- **Respondents:** VHM Industries…

## Timeline

- **2022-08-02 — CIRP Admissio…**: CIRP admission order was passed against…
- **2022-08-22 — Settlement Ag…**: Operational Creditor and Corporate Debtor…

## 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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