IMPORTANT POINTS
(1) Plea of alternative remedy is a self-imposed restriction by superior Courts and is never an absolute bar unless barred by statute.
(2) Application under Section 12A of Insolvency and Bankruptcy Code, 2016 for withdrawal of Corporate Insolvency Resolution Process cannot be kept pending for constitution of CoC, even where such application was filed before constitution of CoC.

JUDGMENT :

VIKRAM NATH, J.

1. Leave granted.

2. The appellant, a suspended Director of the Corporate Debtor¹ [In short “CD”] Manpasand Beverages Ltd. (respondent 2), has filed this appeal assailing the correctness of the order dated 13.04.2021 passed by the National Company Law Tribunal² [In short “NCLT”] Ahmedabad Bench at Ahmedabad in I.A. No. 196 of 2021 arising out of C.P. (I.B.) No. 503 of 2019 rejecting the application of the appellant under section 12A of Insolvency and Bankruptcy Code, 2016³ [In short “IBC”] for withdrawal of Corporate Insolvency Resolution Process.⁴ [In short “CIRP”].

3. CD is in the business of manufacturing and distribution of fruit beverages. It has approximately 700 employees and a turnover of Rs. 984.96 Crores in the Financial Year 2018-2019. The Operational Creditor⁵ [In short “OC”] Huhtamaki PPL Ltd. (respondent No. 1) used to supply packaging material to the CD.

4. The OCs filed a petition under section 9 of IBC before the NCLT, stating a total outstanding amount of Rs. 1,31,00,825/- against the CD. This was registered as CP (IB) No. 503 of 2019.

5. The NCLT by order dated 01.03.2021 passed an order admitting the petition and initiating CIRP. Two days thereafter i.e. 03.03.2021, the OCs and the CD entered into a settlement wherein the CD was required to pay an amount of Rs. 95.72 lakhs. The above settlement was arrived at even before the Committee of Creditors⁶ [In short “CoC”] could be constituted.

6. On 4th March, 2021, the OCs received Rs. 50 Lakhs and again on 8th March, 2021, it received the balance amount of Rs. 45.72 lakhs. Thus, the total amount to be paid as per the settlement, was paid to the OCs. The Interim Resolution Professional⁷ [In short “IRP”] on 10th March, 2021 moved an application under Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2018⁸ [In short “IBBI Regulations”] seeking withdrawal of CIRP against the CD. Along with it the application of OCs dated 09.03.2021 was also attached which was moved under section 12A of IBC. The application for withdrawal was registered as I.A. No. 196 of 2021.

7. In the meantime, an appeal was preferred against the admission order dated 01.03.2021 before the National Company Law Appellate Tribunal⁹ [In short “NCLAT”] apparently on the ground that section 9 of IBC petition was not maintainable as there was a pre-existing dispute. On 26.03.2021, the appeal was withdrawn before the NCLAT with liberty to apply for revival of the appeal in case the settlement failed. The NCLAT while allowing the withdrawal of the appeal granted stay of formation of CoC. The said order dated 26.03.2021 is reproduced below:

“1. Mr. Vikram Nankani, Advocate appears for the Appellant. He submits that Respondent No. 1-Operational Creditor filed CP (IB) No. 503/9/NCLT/AHM/2019 before Adjudicating Authority (NCLT Ahmedabad Bench, Court No. 1). The Application was filed under section 9 of Insolvency and Bankruptcy Code, 2016 (IBC in short) against the Respondent No. 2 M/s. Manpasand Beverages Ltd. the Corporate Debtor. Appellant is the Director of the Suspended Board of the Corporate Debtor. Respondent No. 3 is Interim Resolution Professional.

2. Learned counsel for the Appellant submits that the Application was admitted by the Impugned Order and Appeal is filed. It is stated that thereafter the Appellant has settled the claim of Operational Creditor and the Operational Creditor has filed Application for withdrawal copy of which is at Page 348 and even the IRP has filed Application before the Adjudicating Authority copy of which is at Page 368. The Application for withdrawal under section 12A of IBC has been filed through IRP. Mr. Salil Thakore, Advocate agrees with the Learned Counsel for the Appellant that there has been a settlement and accordingly Application under section 12A of IBC has been filed. The Learned Counsel for IRP however states that the money has been paid violating moratorium whi