# In the matter of Weaverly Jute Mills Private Limited IA(I.B.C)-1501(KB)2022 in C.P. (IB)-375(KB)2021

> NCLT judgment dated 2022-11-30. Citation: TCN-2022-NCLT-00280. The case involves an application (IA(I.B.C)/1501(KB)2022) filed seeking withdrawal of a…

- **Court:** NCLT
- **Order date:** 30 Nov 2022
- **Citation:** TCN-2022-NCLT-00280
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/weaverly-jute-mills-private-limited-iaibc-1501kb2022-in-cp-ib-375kb2021-6f64dd08

## Summary

### Background

The case involves an application (IA(I.B.C)/1501(KB)2022) filed seeking withdrawal of a petition admitted under Section 9 of the Insolvency and Bankruptcy Code (IBC) by the Adjudicating Authority. The parties involved have settled the matter between themselves before the constitution of the Corporate Insolvency Resolution Process (CIRP). The application is supported by an affidavit of the Interim Resolution Professional (IRP), and the costs, including the IRP fees, have been paid.

## Facts

Shib Shankar Rungta, proprietor of S.S. Rungta & Company, filed a petition against Weaverly Jute Mills Private Limited under Section 9 of the IBC. An application (IA(I.B.C)/1501(KB)2022) was filed seeking withdrawal of the petition. The parties settled the matter before the constitution of the CIRP. The IRP supported the withdrawal, and the costs, including the IRP fees of Rs. 2,41,819/-, were paid. The Adjudicating Authority considered the application under Rule 11 of the NCLT Rules, 2016. The Committee of Creditors had not been constituted, and Form FA was annexed. The relevance of these facts lies in demonstrating the resolution of the dispute outside the formal CIRP process, leading to the withdrawal of the insolvency petition.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can allow the withdrawal of a petition admitted under Section 9 …

**Ratio:** The legal principle is that a petition admitted under Section 9 of the IBC can be

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**Reasoning:** The court reasoned that since the parties had settled before the CIRP was formally

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**Interpretation:** This interprets the IBC as favoring settlement and resolution outside the

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**Application:** In this specific case, the parties settled before the CoC was formed, the IRP

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** Shib Shankar…
- **Respondents:** Weaverly Jute…

## Timeline

- **2022-11-15 — Petition admitted under…**: The Adjudicating Authority admitted the…
- **2022-11-30 — Hearing…**: Hearing on the application for…

## 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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