Unconditional Consent by Sole Financial Creditor is sufficient for withdrawal of CIRP Regulations: NCLT [Read Order]

The instant interlocutory application was filed by Mrs. Neha Bhasin; the Resolution Professional of M/s. Victory Electric Vehicles International Limited ("Corporate Debtor") under section 12A of the Insolvency and Bankruptcy Code, 2016 (''IBC") read with Regulation 30A of the Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations'') seeking withdrawal of the Corporate Insolvency Resolution Process ("CIRP'') initiated against the Corporate Debtor, vide order dated 09.05.2025 passed by the Tribunal.

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The CIRP was initiated vide order dated 09.05.2025. Before the CoC could be constituted a settlement was reached between the Operational Creditor and the Corporate Debtor. The terms of the settlement were finalized and a formal deed incorporating the terms of settlement was executed on 20.05.2025.

The instant proceeding under Section -12A was filed by the Applicant on 22.05.2025. The Form FA was executed by the Operational Creditor on 20.05.2025. A copy of the said Form FA, duly executed by the Operational Creditor and submitted to the Applicant, is placed on record, annexed as Annexure A-5 of the Application.

In compliance with the Order of NCLAT the instant IA was taken up for hearing on 13.06.2025. On the said date this bench passed an order. It is addressed to the Suspended Board of Directors of the Corporate Debtor and sent on behalf of legal team of the HDFC Bank. The Applicant has failed to show any authorization given on behalf of the Bank to its legal team to file a ‘no objection’.

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In the instant case CoC was constituted on 08.06.2025 with HDFC Bank as the sole Financial Creditor. In terms of provision of regulation of 12A withdrawal of application under section 9 can be allowed by the Adjudicating Authority if the same is approved by 90% of voting share by the CoC.

The NCLAT, vide its order dated 11.06.2025, directed that the application filed under Section 12A of the Insolvency and Bankruptcy Code, 2016 (IBC) be disposed of expeditiously. However, vide the same order Hon’ble NCLAT stated that meeting of the CoC shall be kept in abeyance till the disposal of application.

The HDFC Bank is the sole Financial Creditor and the sole member of the CoC as submitted by the IRP in IA 3034/2025. Since there is stay on conduct of CoC meeting and hence voting on withdrawal proposal can not take place, HDFC has filed an affidavit expressing its unconditional consent and raising no objection to the withdrawal of the application under Section 12A.

Certain peculiar facts and circumstances have arisen in this withdrawal of CIRP application. Notably while the substantive section 12 A of IBC puts a condition that approval of 90% voting share of committee of creditors is mandatory for granting withdrawal, however the CoC meeting cannot be conducted in view of the order passed by the Appellate Court.

Regulation 30A which provides for procedure once again speaks of approval by 90% voting share by the committee even for moving the withdrawal application. The provisions have been impliedly complied with by giving a no objection by the sole Financial Creditor i.e. HDFC Bank through an affidavit referred to in para 13 of this order.

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The tribunal noted that the whole conspectus of the facts was put before the NCLAT and the NCLAT directed us to dispose of the instant IA in the background of the fact that the only Financial Creditor has given no objection. The only Financial Creditor HDFC Bank has given unconditional consent that amounts to 100% in terms of approval required by Section 12A IBC.

The bench comprising Justice Jyotsna Sharma (Member-Judicial) and Anu Jagmohan Singh (Member-Technical) held that in compliance with Regulation 30A, the Resolution Professional has filed an affidavit dated 05.06.2025 stating that demand drafts amounting to ₹3,10,000/- have been issued towards CIRP costs incurred till filing of this application.

The CIRP initiated by our order dated 09.05.2025 in the main petition is withdrawn under Section 12A of the Insolvency and Bankruptcy Code, 2016 and the instant application is allowed accordingly.

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