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Late Insolvency Case Withdrawal: NCLT Imposes Rs 15 Lakh Cost on SpiceJet,
The , on , allowed to withdraw its insolvency petition against , but imposed a cost of Rs 15 lakh for seeking withdrawal after the matter had been reserved for orders.
A Special Bench comprising Judicial Member Mahendra Khandelwal and Technical Member Anu Jagmohan Singh permitted the withdrawal under . However, the Bench directed the and the to each deposit Rs 7.5 lakh in the within seven days.
Settlement After Arguments
had filed the petition under , seeking initiation of the against SpiceJet. The matter was extensively argued and the parties were directed to file written submissions. The Bench reserved orders on , along with seven other insolvency petitions against SpiceJet.
Before the pronouncement of the order, senior counsel for both sides informed the Tribunal that the dispute had been settled and they would move an application for withdrawal. The Bench deferred the pronouncement to .
Withdrawal at a Cost
In the application for withdrawal, sought liberty to withdraw the petition in terms of the settlement agreement, with the right to revive it in case of default. However, the Tribunal declined to take the settlement agreement on record, observing that seven other matters concerning the same were pending and four more were awaiting hearing.
“Therefore, at this stage, we are not inclined to consider and take into account or take on record the settlement agreement entered between the parties especially in view of the fact that the petition for initiation of CIRP against the same in other 7 matters are pending.”
Since the petition had not yet been admitted, the proceedings were considered rather than . The Bench held that if the no longer wished to pursue the petition, it was entitled to withdraw it.
“Since the petition has not been admitted so far, therefore, the proceeding is to be treated as a proceeding and not proceeding .”
Key Observations
The Tribunal noted that the request for withdrawal came at a very belated stage—after the matter had been argued and orders reserved. Consequently, it imposed costs.
“Since the request for withdrawal has been made at such a belated stage of the proceeding, withdrawal is subject to payment of cost of Rs. 15,00,000/- payable equally by the and i.e. Rs. 7,50,000/- each to be deposited in the Prime Minister’s National Relief Fund within a period of 7 days from today.”
The Bench clarified that the order permitting withdrawal would take effect only upon the parties producing proof of payment to the Registry. If they fail to comply, the matter may be placed before the Bench for further directions.
Final Order
The NCLT dismissed the petition as withdrawn, disposed of the application, and imposed costs payable to the . The decision underscores the Tribunal's reluctance to permit withdrawal of reserved matters without consequences, especially when multiple cases against the same debtor are pending.
