2026 Supreme(Online)(NCLAT) 628

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan (Chairperson) , Mr. Indevar Pandey (Member (Technical)) ,
CHANDRA PRAKASH LOHIA @ NITESH LOHIA – Appellant
Versus
WEST BENGAL AGRO TEXTILE CORPORATION LTD – Respondent
2025/ND/2026 IA

Before constitution of CoC, a Section 12A withdrawal application filed through the IRP as per Regulation 30A does not require hearing of all potential creditors; only the operative creditor, corporate debtor and IRP are concerned parties.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 12A - Withdrawal of Corporate Insolvency Resolution Process (CIRP) - Procedure - Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - Where application for withdrawal is filed before constitution of Committee of Creditors (CoC), it can be made by the applicant through the Interim Resolution Professional (IRP) and the Adjudicating Authority may allow it; no requirement of approval by CoC with 90% voting share. (Para 37 of Abhishek Singh, as affirmed in GLAS Trust).

(B) Insolvency and Bankruptcy Code, 2016 - Section 12A - Withdrawal of CIRP - Stages - Hon'ble Supreme Court in GLAS Trust Company LLC v. BYJU Raveendran identified four stages: (i) before admission of application; (ii) after admission but before constitution of CoC; (iii) after constitution of CoC but before issue of invitation for expression of interest; (iv) after issue of such invitation. At stage (ii), NCLT must hear parties concerned and consider relevant factors, but is not obliged to hear every potential creditor who has not filed an objection. (Paras 63.2, 27, 28)

Facts of the case:
The corporate debtor, a State-owned entity, was subject to a Section 9 application by an operational creditor which was admitted on 22.08.2025 appointing an IRP. A Settlement Agreement dated 18.08.2025 had been entered into between the corporate debtor and the operational creditor. On 23.08.2025, the IRP received an email from the operational creditor with Form-FA seeking withdrawal of the application. The IRP did not issue any public announcement. On 25.08.2025, the IRP filed an application under Section 12A for withdrawal. The Adjudicating Authority allowed the application on 27.08.2025. Two other parties who claimed to have filed Section 9 applications against the same corporate debtor appealed, arguing they were not heard and the proceedings had become in rem.

Findings of Court:
The Appellate Tribunal held that the IRP filed the Section 12A application in accordance with Regulation 30A, which mandates filing within three days of receipt of the withdrawal request. No CoC was constituted and no publication was made. No objection was filed by the appellant or any other person before the Adjudicating Authority. The facts were fully covered by the Supreme Court's judgment in Abhishek Singh v. Huhtamaki PPL Ltd., affirmed in GLAS Trust Company LLC, where it was held that where an application for withdrawal is filed before constitution of CoC, only the operational creditor, corporate debtor and IRP are concerned parties. The settlement was entered before the admission order, which was a relevant factor. No infirmity was found in the order allowing withdrawal.

Issues: (i) Whether the Adjudicating Authority ought to have heard the appellant (who claimed to have filed a separate Section 9 application) before allowing the Section 12A withdrawal application? (ii) Whether the procedure under Regulation 30A for withdrawal before constitution of CoC requires notice to all potential creditors?

Ratio Decidendi: The court held that under Regulation 30A(1)(a), before constitution of the CoC, the IRP is obliged to file the withdrawal application within three days of receipt of the request. The procedure does not require notice to other creditors who have not filed objections. The law as laid down in Abhishek Singh and GLAS Trust establishes that at this stage, only the applicant creditor, corporate debtor, and IRP are parties concerned. Merely because other Section 9 applications are pending does not create a right to be heard in a withdrawal proceeding where the application was filed in accordance with the prescribed procedure and no objection was raised. Result : Appeals dismissed.