Adjudicating Authority has rejected the Application on the ground that the Application Section 12A of the IBC is not filed by the Applicant (Operational Creditor) on whose instance CIRP initiated against the Corporate Debtor.
No doubt, as per Section 12A of the IBC, the Application must be filed by the Applicant and Regulation 30A of the Regulations provides the procedure and format of the Application i.e. FA.
Now the question arises that when the admitted claim of the Operational Creditor and other creditors are satisfied by the Corporate Debtor and CoC approved the resolution for withdrawal of the Application by 100% voting share and the Corporate Debtor has provided a bank guarantee as per sub-Regulation 2 of Regulation 30A even though the Operational Creditor (Applicant) misusing his position, refused to sign the form FA and does not file Application under Section 12A of the IBC.
In aforesaid peculiar facts and circumstances of the case, no cause of action survives in favour of the Operational Creditor to proceed with CIRP.
Thus, exercising the inherent powers under Rule 11 of NCLAT, Rules, 2016 to prevent abuse of process, the Appellate Authority set aside the impugned order as well as the order of initiating CIRP against the Corporate Debtor.
Resultantly, the Corporate Debtor Company was released from the rigours of the CIRP and was allowed to function through its Board of Directors from immediate effect. The IRP shall hand over the records to the Board of Directors.
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