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SC holds restriction on withdrawal of CIRP after issue of invitation for expression of interest is directory

In Appeal (C) No(s). 31557/2018, BRILLIANT ALLOYS PRIVATE LIMITED vs MR. S. RAJAGOPAL & ORS., the corporate debtor, financial creditor and the operational creditor entered into a settlement. Based on the settlement, the corporate debtor submitted application for withdrawal.
Relying on Regulation 30A of the Insolvency Code (IBC), the Chennai Bench of NCLT refused to permit withdrawal of application on the ground that Resolution Professional has already issued invitation of expression of interest.

On appeal, the Supreme Court allowing the settlement decided that Regulation 30A has to be read subject to Section 12A of IBC, which does not impose the condition that withdrawal application has to be filed before the invitation of expression of interest. The Court further held that, this stipulation can only be construed as directory depending on the facts of each case.

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