NCLAT Delhi closed the CIRP after creditors settled claims and the appellant agreed to pay costs, despite procedural impasse under Section 12A.
NCLAT Closes CIRP After Creditor Settlement
The National Company Law Appellate Tribunal (NCLAT), Delhi, closed the Corporate Insolvency Resolution Process (CIRP) for a corporate debtor after all financial creditors had settled their claims, and the appellant undertook to pay the determined CIRP costs, despite a deadlock under Section 12A of the Insolvency and Bankruptcy Code (IBC).
Noting that the primary objectives of CIRP — resolution or asset maximization — had been achieved through private settlement, the tribunal exercised its equitable jurisdiction to allow closure. It held that continuation of the process would be redundant and wasteful once all claims were resolved and costs assured.
Implications for Practitioners
This decision demonstrates NCLAT’s flexibility in closing CIRP on equitable grounds, even in the absence of formal resolution plans. Legal advisors may now argue for early closure where settlements are complete, reducing costs and administrative burden in non-viable insolvency cases.
