Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2018 Supreme(SC) 1928

SUPREME COURT OF INDIA
Rohinton Fali Nariman, Navin Sinha, JJ.
Brilliant Alloys Private Limited - Appellant
Versus
Mr. S. Rajagopal & Ors. - Respondents
Petition(s) for Special Leave to Appeal (C) No(s). 31557/2018(Arising out of impugned final judgment and order dated 01-11-2018 in MA No. 536/2018 passed by the National Company Law Tribunal, Divisional Bench, Chennai)
Decided On : 14-12-2018

Advocates Appeared:
Ms. Nandini Sen Mukherjee, AOR, for the Appellant; Mr. G. Ananda Selvam, Adv. Mr. K. Mayilsamy, Adv. Mauriya Nihangam, Adv. Ms. Lakshmi Ramamurthy, AOR Mr. Sanjay Kapur, AOR Ms. Megha Karnwal, Adv. Mr. Bharat G., Adv. Ms. Reena Pandey, AOR Mr. Anurag Pandey, Adv., for the Respondent

The stipulation in Regulation 30A is directory and can be construed depending on the facts of each case.

Headnote:
Regulation 30A - Withdrawal of Resolution Application - The court allowed the withdrawal of the settlement despite Regulation 30A stating that withdrawal cannot be permitted after the invitation for expression of interest. The court interpreted Regulation 30A in conjunction with Section 12A and concluded that the stipulation in Regulation 30A is directory and can be construed depending on the facts of each case.
Fact of the Case:

The withdrawal of the settlement was not allowed due to Regulation 30A, despite the agreement of the Corporate Debtor and the Financial Creditor. The court annulled the proceedings and allowed the Settlement.
Finding of the Court:

The court found that the stipulation in Regulation 30A is directory and can be construed depending on the facts of each case, allowing the Settlement to be entered into and annulling the proceedings.
Issues: Withdrawal of settlement, Interpretation of Regulation 30A and Section 12A
Ratio Decidendi: The stipulation in Regulation 30A is directory and can be construed depending on the facts of each case.
Final Decision: The court allowed the Settlement and annulled the proceedings.

ORDER

1. The only reason why the withdrawal was not allowed, though agreed to by the Corporate Debtor as well as the Financial Creditor -State Bank of India and the Operational Creditor-Respondent No. 3, is because Regulation 30A states that withdrawal cannot be permitted after issue of invitation for expression of interest.

2. According to us, this Regulation has to be read along with the main provision Section 12A which contains no such stipulation.

3. Accordingly, this stipulation can only be construed as directory depending on the facts of each case.

4. Accordingly, we allow the Settlement that has been entered into and annul the proceedings.

5. The Special Leave Petition is disposed of accordingly.

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