GLAS TRUST COMPANY LLC  versus BYJU RAVEENDRAN & ORS.
[2024] 10 S.C.R. 1802, Supreme Court of India, 2024
Outcome: Unknown
Segment: Issues
[2024] 10 S.C.R. 1802 : 2024 INSC 811
GLAS Trust Company LLC  
v. 
BYJU Raveendran & Ors.
(Civil Appeal No. 9986 of 2024 )
23 October 2024
[Dr Dhananjaya Y Chandrachud,* CJI,  
J.B. Pardiwala and Manoj Misra, JJ.]
Issue for Consideration
Whether the appellant, who was not a party to the settlement 
between the second respondent-BCCI (Operational Creditor) and 
the Corporate Debtor, has locus in the proceedings before this 
Court; whether the NCLAT erred in invoking its inherent powers 
under Rule 11 of the NCLAT Rules 2016 in the presence of a 
prescribed procedure for withdrawal of Corporate Insolvency 
Resolution Process (CIRP) and settlement of claims between 
parties; and without prejudice to the above, whether the NCLAT 
adequately addressed the objections raised by the appellant, 
while exercising its discretionary power under Rule 11 of the 
NCLAT Rules 2016.
Headnotes†
Insolvency and Bankruptcy Code, 2016 – s.62 – Appeal to 
Supreme Court – “any person aggrieved” – Appellant claiming 
to be a Financial Creditor, if falls within the ambit of the phrase 
“any person aggrieved” and has the locus standi to institute 
the present appeal:
Held: Yes – Under Section 62 governing statutory appeals to 
the Supreme Court from the orders of the NCLAT, “any person” 
aggrieved by the order of the NCLAT may file an appeal before 
the Supreme Court – Section 61 which provides for appeals to 
NCLAT from orders of the NCLT uses similar language – The 
use of the phrase “any person
aggrieved” indicates that there is 
no rigid locus requirement to institute an appeal challenging an 
order of the NCLT, before the NCLAT or an order of the NCLAT, 
before this Court – Any person who is aggrieved by the order may 
* Author
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
institute an appeal, and nothing in the provision restricts the phrase 
to only the applicant creditor and the corporate debtor – Once the 
CIRP is initiated, the proceedings are no longer restricted to the 
individual applicant creditor and the corporate debtor but rather 
become collective proceedings (in rem), where all creditors, such 
as the appellant, are necessary stakeholders – Appellant is not 
an unrelated party to the CIRP, but is an entity whose claims had 
been verified by the IRP. [Paras 75, 76]
Insolvency and Bankruptcy Code, 2016 – s.12A – National 
Company Law Appellate Tribunal Rules, 2016 – r.11 – CIRP 
Regulations 2016 – Regulation 30A – Second respondent-BCCI 
(an Operational Creditor had executed the ‘Team Sponsor 
Agreement’ with the Corporate Debtor-third respondent) filed 
application under Section 9 of the IBC, w.r.t an operational 
debt of approx. Rs.158 crore payable by the third respondent 
under the aforesaid Agreement – Petition admitted by NCLT, 
CIRP initiated against third respondent – Invoking inherent 
powers under Rule 11, NCLAT approved a settlement between 
the parties and set aside the order of NCLT – When the 
settlement was sought by the first respondent (former director 
of the Corporate Debtor) before NCLAT, the Section 9 petition 
had already been admitted and the Section 7 petition had also 
been disposed of on that basis – However, admittedly, the 
CoC had
not been constituted – NCLAT stayed the formation 
of the CoC:
Held: In such cases, the legal framework mandates that an 
(i) application for withdrawal be moved; (ii) the application has to 
be moved through the IRP; and (iii) it be placed before the NCLT 
for approval – None of these requirements were met – Despite 
grave deviations, NCLAT still proceeded with approving the 
settlement and setting aside the CIRP by invoking its inherent 
power under Rule 11 – Recourse to Rule 11 was not warranted – 
‘Inherent powers’ cannot be used to subvert legal provisions, which 
exhaustively provide for a procedure – To permit the NCLAT to 
circumvent this detailed procedure by invoking its inherent powers 
under Rule 11 would be contrary to the carefully crafted procedure 
for withdrawal – NCLAT provided no reasons for deviating from 
this procedure or the urgency to approve the settlement without 
following the procedure – The correct course of action by the 
NCLAT would have been to stay the constitution of the CoC and
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direct the parties to follow the course of action in Section 12A read 
with Regulation 30A of the CIRP Regulations 2016 – Even if the 
procedural infirmity is kept aside, once the CIRP was admitted, the 
proceedings became collective, and all creditors of the Corporate 
Debtor became stakeholders – NCLT must hear all the concerned 
parties and consider all relevant factors on the facts of each case 
even while invoking Rule 11 to allow withdrawal – Appellant raised 
detailed objections before the NCLAT to the source of the funds 
for the settlement and a reasonable apprehension that there was 
round tripping of funds, in violation of the order passed by the 
Delaware Court – These objections were summarily dismissed by 
the NCLAT, relying solely on the undertaking filed by one of the 
former directors of the Corporate Debtor – NCLAT did not adequately 
address the alleged facts such as the fraudulent transfer of USD 
533 million to a hedge fund in the United States; the orders of the 
US Court restraining the brothers from transferring or dissipating 
the amount; the contempt proceedings against one of the former 
directors of the Corporate Debtor; the ongoing investigation by ED 
against the first respondent and the Corporate Debtor; and other 
attempts by the Corporate Debtor to dissipate assets – Impugned 
judgment of the NCLAT approving the settlement between the 
parties and setting aside the order of the NCLT
admitting the 
Section 9 petition, set aside – However, appellant’s objections to 
the settlement agreement on merits not adjudicated as the issues 
raised are subject matter of several litigations in different fora, 
including the United States Bankruptcy Court, District of Delaware 
and investigation by various authorities, including the ED, which 
are pending – CoC constituted, parties may invoke their remedies, 
to seek a withdrawal or settlement of claims – CoC to maintain 
amount of Rs.158 crores, along with accrued interest, if any, in 
an escrow account until further developments and to abide by the 
further directions of NCLT. [Paras 79-81, 86-88]
Insolvency and Bankruptcy Code, 2016 – ss.7, 9, 10, 
12A  – Insolvency and Bankruptcy (Second Amendment) 
Act, 2018 – National Company Law Tribunal Rules, 2016 – 
r.8 – CIRP Regulations 2016 – Regulation 30A – IBBI (CIRP) 
(Third Amendment) Regulations, 2018 – 2019 Amendment to 
Regulation 30A of the CIRP Regulations w.e.f. 25-07-2019 – 
Procedure for the withdrawal of CIRP or settlement of claims – 
Four stages:
[2024] 10 S.C.R. 
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
Held: (i) Before the application under Sections 7, 9 or 10 is admitted 
by the NCLT; (ii) After an application under Sections 7, 9, or 10 
is admitted, but before the CoC has been constituted; (iii) After 
an application under Section 7, 9 or 10 is admitted, the CoC has 
been constituted and the invitation for expression of interest has 
not been issued; (iv) After an application under Section 7, 9 or 
10 is admitted, the CoC has been formed and the invitation for 
expression of interest has been issued – Explained – In view of 
the detailed procedure to deal with withdrawal or settlement at both 
stages post admission- before and after the CoC is constituted, 
the requirement to invoke discretionary power such as Rule 11 
of the NCLT Rules, or Rule 11 of the NCLAT Rules or even the 
power of this Court under Article 142 of the Constitution of India 
no longer arises. [Para 63, 64]
National Company Law Appellate Tribunal Rules, 2016 – 
r.11 – Scope of powers under – Stated – National Company 
Law Tribunal Rules, 2016 – r.8 – Code of Civil Procedure, 
1908 – s.151.
CIRP Regulations 2016 – Regulation 30A – IBBI (CIRP) 
(Third Amendment) Regulations, 2018 – 2019 Amendment 
to Regulation 30A w.e.f. 25-07-2019 – Requirement under 
Regulation 30A (1) to move an application before the NCLT 
through the IRP, in cases where the CoC is not constituted, 
whether a mere technicality which can be dispensed with:
Held: No – The fact that the application is to be submitted by the 
IRP rather than the parties themselves is not a distinction without 
difference – Once the application is admitted and CIRP is initiated, 
it is the IRP who takes charge of the affairs of the corporate 
debtor – The proceedings become collective proceedings and the 
interests of the former management of the corporate debtor, become 
disjunct from the interest of the corporate debtor – Therefore, the 
parties (such as the former management of the corporate debtor) 
must submit their application for withdrawal through the IRP who 
is now the person in control of the insolvency proceedings – 
NCLT conducts an adjudicatory exercise when the application for 
withdrawal is placed before it and the procedure is not a mere 
technicality. [Para 66]
Insolvency and Bankruptcy Code, 2016 – Chapter II – ss.7, 9, 
10 – Insolvency and Bankruptcy (Second Amendment) Act,
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2018 – s.12A – CIRP Regulations 2016 – Regulation 30A – 
Insolvency and Bankruptcy (Application to Adjudicating 
Authority) Rules, 2016 – r.8 – Withdrawal and settlement of 
claims – Evolution of law – Discussed.
Case Law Cited
Kamal K. Singh v. Dinesh Gupta (2022) 8 SCC 33; Ashok G. 
Rajani v. Beacon Trusteeship Ltd [2022] 18 SCR 133 : 2022 SCC 
OnLine SC 1275 – held per incuriam.
Abhishek Singh v. Huhtamaki PPL Limited [2023] 4 SCR 596 : 
2023 SCC Online SC 349 – distinguished.
Swiss Ribbons (P) Ltd. v. Union of India [2019] 3 SCR 535 : (2019) 
4 SCC 17 – relied on.
Arun Kumar Jagatramka v Jindal Steel & Power Ltd [2021] 3 SCR 
114 : (2021) 7 SCC 474; Indus Biotech (P) Ltd. v. Kotak India 
Venture (Offshore) Fund [2021] 7 SCR 112 : (2021) 6 SCC 436; 
Lokhandwala Kataria Construction (P) Ltd. v. Nisus Finance and 
Investment Managers LLP (2018) 15 SCC 589; Mothers Pride 
Dairy India Private Limited v. Portrait Advertising and Marketing 
Private Limited 2017 SCC OnLine SC 1789; Uttara Foods & Feeds 
(P) Ltd. v. Mona Pharmachem (2018) 15 SCC 587; Brilliant Alloy 
Private Limited v. S Rajagopal and Ors (2022) 2 SCC 544; Ram 
Chand and Sons Sugar Mills (P) Ltd. v. Kanhayalal Bhargava 
[1966] 3 SCR 856 : 1966 SCC OnLine SC 215; Ebix Singapore 
(P) Ltd. v. Educomp Solutions Ltd. (CoC) [2021] 14 SCR 321 : 
(2022) 2 SCC 401 – referred to.
List of Acts
Insolvency and Bankruptcy Code, 2016; National Company Law 
Tribunal Rules,
2016; National Company Law Appellate Tribunal 
Rules, 2016; CIRP Regulations 2016; Insolvency and Bankruptcy 
(Second Amendment) Act, 2018; IBBI (CIRP) (Third Amendment) 
Regulations, 2018.
List of Keywords
Byju; Online educational services; Ed-tech services business; 
Corporate Debtor, Financial Creditor; Operational Creditor; ‘Team 
Sponsor Agreement’; Board of Control for Cricket in India (BCCI); 
Sponsorship of the Indian National Cricket Team; Administrative
[2024] 10 S.C.R. 
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
Agent’ of the lenders; Corporate Insolvency Resolution Process 
(CIRP); Interim Resolution Professional (IRP); Operational debt; 
Locus/Locus standi; Inherent powers under Rule 11 of the NCLAT 
Rules 2016; Discretionary powers; Not unrelated party to CIRP, 
Claims verified by IRP; Prescribed procedure for withdrawal of CIRP; 
Withdrawal or settlement at both stages post admission- before 
and after the CoC is constituted; Settlement of claims between 
parties; Settlement agreement; Appeal to Supreme Court; “any 
person aggrieved”; Applicant creditor; Collective proceedings; in 
rem; All creditors stakeholders; Application for withdrawal; NCLAT 
approved the settlement; Section 9 petition; Section 7 petition; 
CIRP set aside; Constitution of the CoC; CIRP admitted, Objections 
before the NCLAT; Source of the funds for the settlement; Round 
tripping of funds, Fraudulent transfer; Hedge fund; United States 
Bankruptcy Court, District of Delaware; Proceedings before the 
Delaware Court; Interim stay; Interim order staying the constitution 
of the CoC; Debt enforcement; Preferential payment; Oppression; 
Mismanagement; Ongoing investigation; Enforcement Directorate 
(ED); Objections summarily dismissed.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9986 of 2024
From the Judgment and Order dated 02.08.2024 of the National 
Company Law appellate Tribunal, Chennai in CAAT (CH) (I) No. 
262
of 2024
With
Special Leave Petition (C) No. 21023 of 2024
Appearances for Parties
Kapil Sibal, Shyam Divan, Sr. Adv., Prateek Kumar, Ms. Raveena 
Rai, Ms. Smriti Nair, Nishant Sharma, Ms. Anshula Laroiya,  
Ms. Manisha Singh, M/S. Khaitan & Co., Advs. for the Appellant.
Tushar Mehta, SG/Sr. Adv., Dr. Abhishek Manu Singhvi, Neeraj 
Kishan Kaul, Ramji Srinivasan, Gopal Sankaranarayanan,  
S. Niranjan Reddy, Sr. Advs., Zulfiquar Memon, Rishabh Gupta, 
Waseem Pangarkar, Mrinal Bharti, Kunal Vajani, Avishkar Singhvi, 
Amit Bhandari, Vivek Jain, Mrs. Nadiya Sarguroh, Swapnil 
Srivastava, Mrs. Kanika Goenka, Mrs. Swagata Ghosh, Jayesh 
Srivastava, Ms. Kashika Gera, Yashowardhan Dixit, Ms. Gargi Patil,
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Ms. Aditi Tiwari, Allan David, Ms. Yashita Bharadwaj, Deepak Joshi, 
M/s. Mzm Legal Delhi Llp, R. Sudhinder, Ms. Adity Chaudhury, Ms. 
Bhavya Mohan, Rahul Dev, Ms. Aastha Trivedi, Ms. Ann Pereira, 
Kanu Agrawal, Ms. Mili Baxi, Arjun Amin, A. Karthik, I/b Argus 
Partners, Poornachandra B Pattar, Sahil Bhalaik, Tushar Giri, Ms. 
Bhavna Arul, Siddharth Anil Khanna, Ritik Arora, Shivam Mishra, 
Ms. Namrata Saraogi, Arjun Bhatia, Ms. Gulshan Jahan, Ms. Shivani 
Vij, Ms. Trisha Chandran, Syed Jafar Alam, Shankh Sengupta, Ms. 
Tine Abraham, Yogesh Singh, Ms.Manasa Sundarraman, Rangam 
Sharma, Sujoy Sur, Ms. Prarthna Bathija, Rohan Kohli, Shreyash 
Sharma, Shivam Singhania, Ms. Neha Dhavalikar, Shubh Arora, 
Sahil Raveen, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Dr Dhananjaya Y Chandrachud, CJI
Table of Contents*
A.
Background ...............................................................................
5
i.
Parties before this Court ..................................................
5
ii.
Proceedings before the US Courts .................................
6
iii.
Insolvency proceedings against the first respondent ....
8
iv.
Settlement between the parties and proceedings before 
the NCLAT ............................................................................
9
v.
Impugned Judgement ....................................................... 14
vi.
Proceedings before this Court and the Delaware
Court ... 16
B.
Issues ........................................................................................ 18
C.
Submissions ............................................................................ 18
D.
Legal Background .................................................................... 23
i.
Legal context and fundamental principles .................... 23
a.
General principles underlying the IBC ........................ 23
b.
Nature of the proceedings after admission of the 
application ....................................................................
27
* Ed. Note: Pagination as per the original Judgment.
[2024] 10 S.C.R. 
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
ii.
Legal framework for withdrawal and settlement of 
claims ..................................................................................
31
a.
Evolution of the legal framework ...............................
31
b.
Insights from the evolution of the legal framework ...... 44
iii.
Scope of ‘Inherent Powers’ under Rule 11 ........................ 49
E.
Application to the instant case ................................................ 51
i.
Locus of the appellant before this Court ......................... 52
ii.
Approach of the NCLAT in the Impugned Judgement ..... 54
iii.
Decisions of this Court cited in the Impugned 
Judgement .........................................................................
57
F.
Conclusion ................................................................................ 60
1.	
This appeal arises from a judgment of the National Company Law 
Appellate Tribunal, Chennai1 dated 2 August 2024.2 The National 
Company Law Tribunal, Bengaluru,3 admitted the application instituted 
by the second respondent under Section 9 of the Insolvency and 
Bankruptcy Code4 and initiated the corporate insolvency resolution 
process5 against the third respondent. In the exercise of its powers 
under Rule 11 of the National Company Law Appellate Tribunal 
Rules, 2016,6 the NCLAT approved a settlement in relation to the 
dues payable to the third respondent by the second respondent and 
set aside
the order of the NCLT.
2.	
The appellant, who claims to be a Financial Creditor, had moved 
an application before the NCLAT objecting to the approval of the 
settlement and questioned the source of the funds for the settlement. 
The objections of the appellant were rejected by the NCLAT in 
the Impugned Judgement. The present appeal raises substantial 
questions about the legal framework governing the withdrawal of a 
CIRP; the settlement of claims after the admission of an application 
1	
“NCLAT”
2	
“Impugned Judgement”
3	
“NCLT”
4	
“IBC”
5	
“CIRP”
6	
“NCLAT Rules”
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instituted by a debtor; and the scope of the inherent powers vested 
in the NCLAT under Rule 11 of the NCLAT Rules. 
A.	
Background
i.	
Parties before this Court
3.	
The third respondent, Think and Learn Pvt Ltd, a company engaged in 
the business of providing online educational services, is the Corporate 
Debtor.7 The first respondent, Byju Raveendran and his brother, Riju 
Raveendran are former directors of the Corporate Debtor.
4.	
The second respondent, the Board of Control for Cricket in India 
(BCCI) is an Operational Creditor who executed a ‘Team Sponsor 
Agreement’ dated 25 July 2019 with the Corporate Debtor, which 
relates to the sponsorship of the Indian National Cricket Team. 
5.	
The Corporate Debtor has a 100% owned subsidiary, Byju’s Alpha 
Inc. – a company incorporated in the United States of America. Byju’s 
Alpha Inc. availed a loan facility aggregating to approximately USD 
1,200,000,000 under a credit and guarantee agreement dated 24 
November 2021.8 The Appellant, GLAS Trust Company LLC, is the 
‘Administrative Agent’ of all the lenders under this agreement and 
the ‘Collateral Agent’ for the secured parties. Under the terms of 
the Credit Agreement, the Corporate Debtor acted as a guarantor 
and issued a guarantee deed dated 24 November 2021 in favour 
of the appellant. 
ii.	
Proceedings before the Delaware Court
6.	
On account of an alleged default under the Credit Agreement, the 
appellant enforced
the security in respect of the loan and took a series 
of steps that resulted in the removal of all pre-existing directors of 
Byju’s Alpha Inc., including Riju Raveendran and the appointment 
of a new sole director. The appellant contends that despite these 
measures, defaults persisted in payment of the principal outstanding 
amount and the interest accrued under the Credit Agreement.
7	
“Corporate Debtor”
8	
“Credit Agreement”
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
7.	
Accordingly, the appellant, acting as the Administrative Agent of the 
lenders, issued a notice of demand dated 6 December 2023 to the 
Corporate Debtor, invoking the guarantee deed and demanding that 
the Corporate Debtor pay the requisite amount. However, it is the 
case of the appellant, that the Corporate Debtor too defaulted in its 
capacity as the guarantor under the Credit Agreement. 
8.	
It is contended that a series of wire transfers were carried out in 
April and July 2022 by Byju’s Alpha Inc., allegedly at the behest of 
the Corporate Debtor, fraudulently transferring approximately USD 
533 million to a hedge fund based in the United States. A motion for 
preliminary injunctive relief to protect this amount was moved before 
the United States Bankruptcy Court, District of Delaware.9 
9.	
On 18 March 2024, the Delaware Court issued a preliminary 
injunction inter alia restraining Riju Raveendran, another wholly 
owned subsidiary of the Corporate Debtor, the concerned hedge fund, 
and other similarly placed persons from taking any steps to spend, 
transfer, exchange, convert, dissipate, liquidate, or otherwise move 
or modify any rights related to the USD 533 million transferred from 
Byju’s Alpha Inc to the hedge fund. The operative directions of the 
order passed by the Delaware Court read as follows: 
“Defendants Riju Ravindran, Inspilearn LLC (“Inspilearn”), 
Camshaft Capital Fund LP,
Camshaft Capital Advisors, 
LLC, Camshaft Capital Management, LLC; and any 
of such parties’ officers, agents, servants, employees, 
and attorneys, and any other persons who are in active 
concert or participation with the foregoing, including, 
Byju Raveendran and Divya Gokulnath (collectively, the 
“Enjoined Parties”) are immediately enjoined, upon 
entry of this Order, from taking any steps to spend, 
transfer, exchange, convert, dissipate, liquidate, or 
otherwise move or modify any rights related to: (i) 
the funds that in the approximate amount of $533,000, 
I00.00 transferred from the Debtor to Camshaft Capital 
Fund, LP in April and July 2022, (ii) the funds (or other 
assets) transferred to and/or redeemed by a non-U.S. 
9	
“Delaware Court”
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trust on behalf of lnspilearn on or about February 1, 
2024, and (iii) the funds (or other assets) that were 
purportedly subsequently transferred to a “non-US 
based 100% subsidiary of BYJU’S,” along with any 
associated accrued interest or proceeds, in each case 
((i), (ii), and (iii) collectively, the “Alpha Funds”).”
(emphasis supplied)
10.	 On 28 May 2024, the Delaware Court passed an order finding that 
Riju Raveendran was in contempt of the above preliminary injunction 
order dated 18 March 2024. The Delaware Court directed that “full 
discovery shall immediately commence concerning Mr Ravindran’s 
financial situation, including, but not limited to, the location and 
amounts of his assets wherever and however held, including 
(i) how much money he has, including funds in his personal bank 
account(s), and (ii) what other assets he holds” and posted the case 
to a later date to determine the financial penalties to be imposed 
on Riju Raveendran. Eventually, on 31 July 2024, the Delaware 
Court imposed financial penalties of USD 10,000 per day on Riju 
Raveendran, which is payable until the contempt is ”purged by him”.
iii.	
Insolvency proceedings against the first respondent
11.	 On 23 September 2023, the second respondent moved a petition 
under Section 9 of the IBC, in respect of an operational debt of 
approximately Rs 158 crore payable by the Corporate Debtor under 
the Team Sponsor Agreement.10 The NCLT admitted
the petition on 
16 July 2024 and initiated CIRP.11 A moratorium under Section 14 
of IBC was imposed and an Interim Resolution Professional,12 was 
appointed.
12.	 Separately, the appellant also filed a petition under Section 7 of the 
IBC against the Corporate Debtor on 22 January 2024.13 On 16 July 
2024, the NCLT disposed of the Section 7 petition, in view of the 
order passed on the same day admitting the Section 9 petition filed 
10	
Company Petition (IB) No. 149/BB/2023 (“Section 9 Petition”)
11	
“Section 9 Order”
12	
“IRP”
13	
Company Petition (IB) No. 55/BB/2024 (“Section 7 Petition”)
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
by the second respondent.14 The appellant was granted liberty to 
file their claims before the IRP appointed pursuant to the Section 9 
Order. Significantly, the NCLT also granted liberty to the appellant to 
seek a revival of its Section 7 petition, “depending on the subsequent 
developments at the appellate level, if any.” The NCLT directed as 
follows: 
“3. In view of the order passed today i.e., 16.07.2024 by 
this Adjudicating Authority in another Company petition 
bearing C.P (IB) No.149/BB/2023 which is filed by The 
Board and Control for Cricket in India under Section 9 
of the I & B Code 2016 r/w Rule 6 of the Insolvency & 
Bankruptcy (Application to Adjudicating Authority) Rules 
2016, against the same Corporate Debtor herein i.e., 
Think & Learn Private Limited and since the Corporate 
Insolvency Resolution Process (CIRP) has been initiated 
in respect of the Corporate Debtor therein by appointing 
the IRP, the instant C.P is disposed of by granting 
liberty to the Petitioner herein to put-forth their claim 
before the IRP appointed in C.P (IB) No. 149/BB/2023 
in accordance with the provisions of the IBC 2016 and 
the Regulation made thereunder.
4. However, at the request of the Learned Senior Counsel 
for the Petitioner, we hereby grant liberty to the Petitioner 
to seek restoration/revival of the said petition bearing 
C.P (IB) No.55/BB/2024 depending on the subsequent 
developments in the
matter at the Appellate level; if 
any.”
(emphasis supplied)
13.	 The IRP made a public pronouncement on 17 July 2024 and the 
appellant filed its claim in the prescribed format on 25 July 2024. 
iv.	
Settlement between the parties and proceedings before the 
NCLAT 
14.	 Both the appellant and the first respondent moved the NCLAT 
in appeal against the respective orders of the NCLT. The first 
14	
“Section 7 Order”
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respondent challenged the admission of the Section 9 petition by 
the NCLT.15 On the other hand, the appellant challenged the order 
disposing of the Section 7 petition.16 The appellant also moved an 
application before the NCLAT for impleadment in the appeal filed 
by the first respondent, seeking to be heard before any relief was 
granted.17 
15.	 The appeal instituted by the first respondent was placed before the 
NCLAT for the first time on 30 July 2024 and adjourned on a request 
made by the senior counsel for the second respondent. On the next 
date of the hearing, i.e. 31 July 2024, it was recorded, based on the 
submissions by the counsel for the first and second respondents, that 
a sum of INR 50 crore had been transferred to the second respondent 
as part of a settlement. The counsel for the first respondent further 
submitted, before the NCLAT, that another sum of Rs 25 crore would 
be paid by 2 August 2024, and the balance amount of Rs 83 crore 
would be paid thereafter, on or before 9 September 2024.18 
16.	 The payment was purportedly made pursuant to a settlement offer 
extended by Riju Raveendran, in his personal capacity, to the second 
respondent by an email dated July 30, 2024. He proposed to clear 
the operational debt of Rs 158 crore in three tranches on 30 July 
2024,19 2 August 2024 and 9 August 2024, respectively. The second 
respondent agreed to take steps for withdrawal of the petition upon
receipt of full payment of the operational debt. Relevant excerpts of 
the email are as follows: 
“1.⁠ ⁠We undertake to pay INR. 50 crores upfront today i.e. 
30 June 2024, by way of RTGS from the account of its 
promoter, Mr. Riju Ravindran. We shall forward the UTR 
details of the same shortly.
2.⁠ ⁠We further undertake to pay INR. 25 crores on 02 August 
2024 through RTGS.
3.⁠ ⁠The total dues are approximately INR. 158 crores.
15	
CA (AT) (CH) (Ins) No. 262 of 2024.
16	
CA (AT) (CH) (Ins) No. 274 of 2024. 
17	
I.A. No. 727 of 2024.
18	
Impugned Judgement, paras 9-11. 
19	
The settlement offer inadvertently stated “30 June 2024”, which was clarified to be a typographical error 
for 30 July 2024.
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
4.⁠ ⁠The balance amount of INR. 83 crores to complete the 
figures of INR. 158 crores shall be paid on or before 09 
August 2024.
5.⁠ ⁠We shall also hand over post-dated cheques to the tune 
of INR. 83 crores drawn in favour of “Board of Control for 
Cricket in India” payable on 09 August 2024.
6.⁠ ⁠In view of the aforesaid proposed settlement, the parties 
shall jointly request the Hon’ble NCLAT on 31 July 2024 
to suspend the order of admission of Think & Learn Pvt. 
Ltd passed by the NCLT until 09 August 2024.
7.⁠ ⁠Further, once the payment of complete INR. 158 crores 
to BCCI is made, BCCI shall make statement to withdraw 
the Company Petition and take necessary steps towards 
the same.”
17.	 It is common ground that on 31 July 2024, when the parties sought 
to place the settlement on record, although CIRP had been initiated 
and an IRP had been appointed, the CoC had not been constituted. 
Before the NCLAT, the second respondent stated that in view of 
the money being generated in India and coming through a banking 
channel, it shall be accepted and was in favour of the withdrawal of 
CIRP. The appellant, however, raised several objections, including 
inter alia that the alleged payment made by Riju Raveendran 
would constitute a preferential payment to an operational creditor. 
Further, the appellant contended that the source of the funds is 
not clear, and the amount being offered by Riju
Raveendran to 
settle the debt of the second respondent would constitute an act 
of round-tripping. The appellant apprehended that the funds of 
Byjus’s Alpha Inc. were being offered to settle dues in India, in 
contravention of the preliminary injunction issued by the Delaware 
Court on 18 March 2024.
18.	 On 1 August 2024, an affidavit was filed along with an undertaking by 
Riju Raveendran. The affidavit of Riju Raveendran could purportedly 
not be filed in time as he was not in India and thus, the undertaking 
was filed through an authorized representative. In the undertaking, Riju 
Raveendran affirmed that (i) the money being offered for settlement 
between the Corporate Debtor and the second respondent was being 
paid from his personal funds, including the sale of shares held by
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him in the Corporate Debtor; (ii) the money was generated in India 
and is not linked to the money involved in the proceedings pending in 
the Delaware Court; (iii) the first respondent (Byju Raveendran) has 
not transferred any money or extended any security towards raising 
the sums for payment of the settlement amount. The undertaking 
reads as follows:
“…
3. I state and confirm that no part of the Settlement 
Amount is being paid in violation of any order passed 
by any court or tribunal, including orders passed by the 
Delaware Bankruptcy Court.
4. I have not received any portion of the USD 533 million 
that are the subject matter of the proceedings before the 
Delaware Bankruptcy Court and, accordingly, no part of 
those funds have been, or will be, used to pay the BCCI. 
In fact, the funds forming part of the Settlement Amount 
are being paid out of my personal funds, as explained in 
paragraph 8 below.
5. To clarify, under the terms of the Credit Agreement dated 
24 November 2021 (the “Credit Agreement”), a group of 
lenders represented by GLAS Trust LLC (GLAS) disbursed 
an amount of USD 1.2 billion to Byju’s Alpha, Inc. (a 
step-down subsidiary of Think & Learn Pvt. Ltd. (TLPL)). 
Under the Credit Agreement, monies disbursed thereunder 
could not be brought into India. Therefore, none of the 
monies disbursed under the Credit Agreement (of which 
the USD 533 million forms a part) has ever been brought 
into
India. Indeed, the allegation that I have received any 
sum of monies disbursed under the Credit Agreement has 
never been made by GI.AS in any proceeding whatsoever, 
including the proceeding under Section 7 of the IBC filed 
by it before the NCLT.
6. I specifically confirm that there has been no violation of 
the Order dated 18 March 2024 passed by the Delaware 
Bankruptcy Court, and I have not taken any steps in 
contravention of the same. I also confirm that I have not 
directly, indirectly or in any form or manner received any
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
sum of money from disbursements made under the Credit 
Agreement. In fact, the foreign remittance received by 
me since execution of the Credit Agreement is from two 
secondary sales of my shareholding in TLPL in January 
and November 2022 totalling approximately USD 109 
million, as demonstrated by the SH-4 annexed hereto …
7. I further confirm that Byju Raveendran has not transferred 
any money or extended any security of his assets towards 
raising the sums for payment of the Settlement Amount 
to the BCCI.
8. I further state and confirm that the Settlement Amount 
comprises funds raised by me personally:
a. from the sale and the gains/income on such sale of 
shares held personally by me in TLPL between May 
2015 and January 2022. By way of these sales, I had 
accumulated approximately INR 3600 crores. The forms 
SH-4 evidencing these sales are hereto annexed and 
marked Exhibit A. Out of the aforementioned amount, 
approximately INR 1050 crores was paid as income 
tax. The IT returns filed by me over the relevant 
period and which would reflect these amounts are 
hereto annexed and marked Exhibit B. The remaining 
amounts of approximately INR 2600 crores was infused 
back into TLPL due to its operational needs and to 
ensure that TLPL continues to carry on business 
as a going concern, including paying salaries to its 
27000 employees and sustaining the platform which 
has over 150 million students
worldwide (which is a 
matter of record). The amounts that remained with me 
were used to pay the first tranche of the Settlement 
Amount (in the amount of INR 50 crores) to BCCI on 
30 June 2024; and
b. from liquidation of personal assets in India, which will 
be used to pay the balance amount of the Settlement 
Amount.”
19.	 In view of these developments, on 1 August 2024, the NCLAT passed 
an interim order staying the constitution of the CoC.
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v.	
Impugned Judgement
20.	 Before the NCLAT, the appellant contended that (i) Section 12A of 
the IBC and Regulation 30A of the CIRP Regulations 2016 deal 
with the settlement of claims after CIRP is initiated, both before and 
after the CoC is constituted. The first respondent should have, thus, 
approached the NCLT as mandated by Rule 30A instead of invoking 
the inherent powers of the NCLAT under Rule 11; (ii) NCLAT should 
not exercise its discretionary power under Rule 11 of the NCLAT 
Rules because the directors of the Corporate Debtor and its allied 
entities are fugitives, living abroad; have defaulted on government 
dues; Enforcement Directorate proceedings are pending, look out 
notices have been issued; and there has been a significant drop in 
the valuation of the Corporate Debtor; and (iii) the interests of all 
creditors must be considered while accepting a settlement, including 
the appellant who has a substantial interest with regard to the 
Corporate Debtor. 
21.	 On 2 August 2024, the NCLAT delivered the Impugned Judgement. 
After recording the factual background and submissions of the parties 
before it, the NCLAT outlined its reasoning and analysis in paras 44 
to 50 of the Impugned Judgement. The NCLAT held the affidavit and 
undertaking filed by Riju Raveendran made it clear that the money 
was generated by Riju Raveendran from his own sources; income 
tax had been paid on the sales of shares from
which the amount 
was generated; and there was no violation of the Order dated 18 
March 2024 passed by the Delaware Court either directly or indirectly. 
Therefore, NCLAT held that in the absence of any evidence to the 
contrary, there was no reason to believe that the money that was 
being offered by Riju Raveendran was linked to the money disbursed 
to Byju’s Alpha Inc. under the Credit Agreement or from the coffers 
of the Corporate Debtor. 
22.	 Further, it was held that the law regarding the settlement of disputes 
between the parties is in the process of evolution, and this Court 
has approved the invocation of Rule 11 of the NCLAT Rules to 
allow such settlements. Reliance was placed on the decisions of 
this Court in Abhishek Singh vs Huhtamaki PPL Limited20 and 
20	
[2023] 4 SCR 596 : 2023 SCC Online SC 349
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
Kamal K. Singh v. Dinesh Gupta,21 in addition to decisions of the 
NCLAT on the point. Further, it was held that the NCLT had granted 
the appellant the liberty to revive its Section 7 petition, in case of any 
adverse developments in the appellate proceedings in the Section 
9 petition and thus, the right of the applicant to enforce its claims 
was well protected. 
23.	 Accordingly, the settlement between the parties was approved and 
the order of the NCLT admitting the Section 9 petition was set aside. 
The NCLAT directed that in case of a breach of the undertaking and 
affidavit, the Section 9 Order would automatically be revived. The 
operative directions are extracted below: 
“51. Thus, in view of the aforesaid facts and circumstances, 
in view of the undertaking given and affidavit filed, the 
settlement between the parties is hereby approved and 
as a result thereof, the present appeal succeeds and the 
impugned order is set aside, however, with a caveat that 
in case there is a breach in the undertaking given and the 
affidavit filed, the order dated 16.07.2024 passed against 
the present Appellant, shall automatically revive.”
vi.	
Proceedings before this Court and the Delaware Court
24.	 On 1 August 2024, Byju’s Alpha Inc. and the appellant instituted a 
motion before the Delaware Court seeking a temporary restraining 
order against Riju Raveendran, inter alia restraining him from using his
personal assets to satisfy the dues of the second respondent. Before 
the Delaware Court, the appellant contended that fraudulent payments 
were being made by Riju Raveendran to pay the operational debt 
due to the second respondent and dismiss insolvency proceedings 
against the Corporate Debtor, which is “his older brother’s crumbling 
business enterprise in India”. On 8 August 2024, the Delaware Court 
passed an order rejecting the motion. 
25.	 The appellant instituted the present Civil Appeal before this Court, 
challenging the Impugned Judgement of the NCLAT. By an Order 
dated 14 August 2024, this Court issued notice on the appeal and 
directed that there would be a stay on the operation of the Impugned 
21	
(2022) 8 SCC 330.
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Judgment. The second respondent was directed to maintain the 
amount of Rs 158 crores, which has been realized in pursuance of 
the settlement, in a separate escrow account, to abide by further 
directions of this Court.
26.	 In view of the above directions of this Court granting an interim stay 
on the Impugned Judgement, the CIRP proceedings resumed. On 19 
August 2024, the IRP addressed a letter to the appellant noting that 
the CIRP had revived, verified the claim submitted by the appellant 
and admitted the appellant as a financial creditor. Accordingly, the 
IRP constituted the CoC, which consisted of four financial creditors, 
including the appellant. 
27.	 Subsequently, by a letter dated 1 September 2024, the IRP sought 
to reconstitute the CoC and reclassify the claim of the appellant as 
‘contingent’. The IRP stated that the reclassification of the claim as 
‘contingent’ was on account of purported disqualification notices 
issued by the Corporate Debtor to certain lenders of the loan, which 
allegedly disqualified more than sixty percent of the lenders and 
therefore, the appellant no longer had the requisite authorization. 
From the record and submissions before us, it appears that the first 
meeting of the CoC took place on 3 September 2024.
28.	 On 26 September 2024, this Court reserved its judgment and directed 
that the IRP maintain the status quo and not hold any meeting of 
the CoC until the judgment is
pronounced. 
B.	
Issues
29.	 In view of the above background, the following issues arise for our 
consideration: 
a.	
Whether the appellant, who is not a party to the settlement 
between the second respondent and the Corporate Debtor, 
has locus in the proceedings before this Court; 
b.	
Whether the NCLAT erred in invoking its inherent powers 
under Rule 11 of the NCLAT Rules 2016 in the presence of a 
prescribed procedure for withdrawal of CIRP and settlement of 
claims between parties; and 
c.	
Without prejudice to the above, whether the NCLAT adequately 
addressed the objections raised by the appellant, while
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
exercising its discretionary power under Rule 11 of the NCLAT 
Rules 2016.
C.	
Submissions
30.	 Mr Kapil Sibal and Mr Shyam Divan, Senior Counsel appearing for 
the appellant broadly advanced the following submissions:
a.	
NCLAT should have refrained from exercising its discretionary 
power under Rule 11 of the NCLAT Rules to sanction the 
settlement when there is a prescribed procedure for withdrawal 
and settlement under Section 12A of the IBC read with 
Regulation 30A of the CIRP Regulations 2016; 
b.	
The powers conferred on the NCLAT under Rule 11 of the 
NCLAT Rules are discretionary and should not be exercised 
mechanically in cases where the withdrawal of the application 
would prejudice other stakeholders and may result in numerous 
other creditors filing insolvency actions against the Corporate 
Debtors on account of their unpaid dues; 
c.	
NCLAT failed to deal with the objections raised by the appellant 
about the source of the funds and the conduct of the first 
respondent and his brother, Mr Riju Raveendran. Facts such 
as – the purported fraudulent transfer of USD 533 million to a 
hedge fund in the United States; the orders of the US Court 
restraining the brothers from transferring or dissipating the 
amount; the contempt proceedings against Mr Riju Raveendran; 
the ongoing investigation by the Enforcement Directorate against 
the first respondent and the Corporate Debtor; attempts by
the 
Corporate Debtor to dissipate assets – were not adequately 
dealt with in the Impugned Judgement;
d.	
There are clear indications that the Corporate Debtor cannot 
service its outstanding debts to its financial creditors. There 
has been a 99% drop in the valuation of the Corporate Debtor, 
defaults in paying employees’ salaries, the exit of key managerial 
persons, failure to file financial statements, and oppression 
and mismanagement petitions by the shareholders against the 
promoters, all of which indicate that insolvency proceedings 
are inevitable;
e.	
Setting aside the CIRP merely because one of the creditors 
has recovered its dues by way of a settlement agreement, runs
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contrary to the settled position that the IBC cannot be used as 
a recovery mechanism. Upon initiation of insolvency, third-party 
rights are created in all creditors of the corporate debtor; and 
f.	
Riju Raveendran failed to provide the details of the source of 
funds by way of an affidavit. His undertaking was accompanied 
by an affidavit of a third party who claims to be a power of attorney 
holder of Riju Raveendran. The declaration in the undertaking 
is ambiguous and the figures mentioned do not add up so as to 
enable him to make payments under the settlement agreement.
31.	 Dr Abhishek Manu Singhvi and Mr Neeraj Kishan Kaul, Senior 
Counsel for the first respondent advanced the following submissions: 
a.	
The inherent powers of the NCLAT, under Rule 11 of the 
NCLAT Rules, include the power to pass orders permitting the 
withdrawal of the CIRP. In several judgements, after Section 
12A was inserted in the IBC, the NCLAT has invoked Rule 11 
to permit the withdrawal of CIRP; 
b.	
The appellant has no locus to maintain the present proceedings 
before this Court. In a case of settlement between a corporate 
debtor and an individual creditor, there is no scope for hearing 
any third-party creditor, as such a creditor is free to adopt other 
remedies for its claims;
c.	
Despite liberty being granted to the appellant to revive its Section 
7 petition, the appellant has failed to do so, because a revival 
would lead to
scrutiny of the maintainability of the Section 7 
petition. As the appellant has a weak case on maintainability, 
it is seeking to piggyback on the Section 9 NCLT Order and is 
opposing the settlement;
d.	
The appellant is indulging in forum shopping. Despite specific 
liberty to revive its Section 7 petition, the appellant chose to 
move an appeal against the order of disposal and intervened 
in the proceedings before the NCLAT instituted by the second 
respondent. In parallel, the appellant also initiated proceedings 
before the Delaware Bankruptcy Court to stall the settlement; 
e.	
The Corporate Debtor is an ed-tech services business, 
whose revenue is generated from its intellectual property and 
subscriptions from students. Revenues are likely to be hit with
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
each day that the Corporate Debtor continues into insolvency, 
which could lead to classes shutting down, disruption of services, 
teachers resigning, and students dropping out; and 
f.	
The Corporate Debtor is a solvent company with a running 
business of 27,000 employees and 150 million students. A 
viable company capable of repaying its debts must not be 
admitted into CIRP.
32.	 Mr Tushar Mehta, the learned Solicitor General appearing for the 
second respondent, supported the arguments of the first respondent 
in support of the Impugned Judgement and also advanced the 
following submissions:
a.	
The IBC aims to prevent the economic death of entities, which 
involves encouraging settlement between the parties. NCLAT 
passed the Impugned Judgement after hearing all concerned 
parties. Thus, there was no infirmity in invoking inherent powers 
under Rule 11 of the NCLAT Rules 2016; 
b.	
Regulation 30A was a statutory response to the decision of this 
Court in Swiss Ribbons (P) Ltd. v. Union of India22 and the 
intent is to encourage settlement. The provision is directory as 
no consequence of non-compliance is stipulated. It does not 
contemplate adjudication about the factum of settlement, the 
mode/method of settlement or any specific legal ground by 
the NCLT;
c.	
Regulation 30A, even if applicable can have no application 
when the settlement is made using personal funds and not the 
funds of the
corporate debtor; and
d.	
The payment to BCCI does not prejudice other creditors or 
stakeholders of the Corporate Debtor as it is not made from 
the possible insolvency estate that would be created if the 
Corporate Debtor goes through CIRP. 
33.	 We also had an opportunity to hear the learned Senior Counsel who 
appeared for the intervenors. Mr Gopal Sankarnarayan appeared 
for an entity that claims to be another Operational Creditor. Another 
intervention application was moved by several shareholders of the 
22	
[2019] 3 SCR 535 : (2019) 4 SCC 17.
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Corporate Debtor, who purportedly hold 16.75% of its issued and 
the paid-up share capital. These shareholders have also instituted 
proceedings under Sections 241, 242 and 244 of the Companies 
Act 2013 for oppression and mismanagement against the erstwhile 
management of the Corporate Debtor, including the first respondent 
and Riju Raveendran. The counsel for the intervenors advanced 
submissions broadly on the same lines as the appellant. They 
assailed the acceptance of the settlement agreement by the NCLAT 
and contended that insolvency proceedings against the Corporate 
Debtor are inevitable. 
D.	
Legal Background 
i.	
Legal context and fundamental principles 
a.	
General principles underlying the IBC 
34.	 Before delving into the provisions which constitute the legal framework 
for the withdrawal of CIRP, it is crucial to delineate some of the 
underlying aims and objectives which guide the IBC. These principles 
will assume relevance while analyzing the locus of the appellant 
and the course of action adopted by the NCLAT in the Impugned 
Judgement. 
35.	 The Statement of Objects and Reasons for the IBC reads as follows: 
“Statement of Objects and Reasons.—There is no single 
law in India that deals with insolvency and bankruptcy. 
Provisions relating to insolvency and bankruptcy for 
companies can be found in the Sick Industrial Companies 
(Special Provisions) Act, 1985, the Recovery of Debts 
Due to Banks and
Financial Institutions Act, 1993, the 
Securitisation and Reconstruction of Financial Assets 
and Enforcement of Security Interest Act, 2002 and the 
Companies Act, 2013. These statutes provide for creation 
of multiple fora such as Board of Industrial and Financial 
Reconstruction (BIFR), Debts Recovery Tribunal (DRT) 
and National Company Law Tribunal (NCLT) and their 
respective Appellate Tribunals. Liquidation of companies 
is handled by the High Courts. Individual bankruptcy 
and insolvency is dealt with under the Presidency Towns 
Insolvency Act, 1909, and the Provincial Insolvency
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
Act, 1920 and is dealt with by the courts. The existing 
framework for insolvency and bankruptcy is inadequate, 
ineffective and results in undue delays in resolution, 
therefore, the proposed legislation.
2.The objective of the Insolvency and Bankruptcy Code, 
2015 is to consolidate and amend the laws relating to 
reorganisation and insolvency resolution of corporate 
persons, partnership firms and individuals in a time-
bound manner for maximisation of value of assets of such 
persons, to promote entrepreneurship, availability of credit 
and balance the interests of all the stakeholders including 
alteration in the priority of payment of government dues 
and to establish an Insolvency and Bankruptcy Fund, 
and matters connected therewith or incidental thereto. 
An effective legal framework for timely resolution of 
insolvency and bankruptcy would support development 
of credit markets and encourage entrepreneurship. It 
would also improve Ease of Doing Business, and facilitate 
more investments leading to higher economic growth and 
development.
[…]
5. The Code seeks to achieve the above objectives.’”
36.	 The long title of the IBC provides that it is “an Act to consolidate and 
amend the laws relating to reorganisation and insolvency resolution 
of corporate persons, partnership firms and individuals in a time 
bound manner for maximisation of value of assets of such persons, 
to promote
entrepreneurship, availability of credit and balance the 
interests of all the stakeholders including alteration in the order of 
priority of payment of Government dues and to establish an Insolvency 
and Bankruptcy Board of India, and for matters connected therewith 
or incidental thereto.” 
37.	 The objectives discernible from the long title and the Statement 
of Objects and Reasons of the IBC were discussed in a decision 
of a two-judge bench of this Court in Swiss Ribbons (P) Ltd. v. 
Union of India.23 This Court observed that the IBC is a beneficial 
23	
[2019] 3 SCR 535 : (2019) 4 SCC 17
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legislation which attempts to put the Corporate Debtor back on its 
feet. According to this Court, this would involve considering the 
interests of all concerned stakeholders rather than viewing the IBC 
as a mere recovery legislation for individual creditors. This Court, 
speaking through Justice RF Nariman, observed as follows: 
“28. It can thus be seen that the primary focus of the 
legislation is to ensure revival and continuation of the 
corporate debtor by protecting the corporate debtor from 
its own management and from a corporate death by 
liquidation. The Code is thus a beneficial legislation 
which puts the corporate debtor back on its feet, not 
being a mere recovery legislation for creditors. The 
interests of the corporate debtor have, therefore, been 
bifurcated and separated from that of its promoters/
those who are in management. Thus, the resolution 
process is not adversarial to the corporate debtor but, in 
fact, protective of its interests. The moratorium imposed 
by Section 14 is in the interest of the corporate debtor 
itself, thereby preserving the assets of the corporate debtor 
during the resolution process. The timelines within which 
the resolution process is to take place again protects the 
corporate debtor’s assets from further dilution, and also 
protects all its creditors and workers by seeing that the 
resolution process goes through as fast as possible so that 
another management can,
through its entrepreneurial skills, 
resuscitate the corporate debtor to achieve all these ends.”
(emphasis supplied)
38.	 A two-judge Bench of this Court, speaking through one of us (DY 
Chandrachud, J), in Arun Kumar Jagatramka v Jindal Steel & 
Power Ltd24 also had occasion to observe the quantum change in 
corporate governance and the rule of law brought in by the enactment 
of the IBC. This Court observed as follows: 
“41. … First and foremost, the IBC perceives good 
corporate governance, respect for and adherence to 
the rule of law as central to the resolution of corporate 
24	
[2021] 3 SCR 114 : (2021) 7 SCC 474
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
insolvencies. Second, the IBC perceives corporate 
insolvency not as an isolated problem faced by 
individual business entities but places it in the context 
of a framework which is founded on public interest 
in facilitating economic growth by balancing diverse 
stakeholder interests. Third, the IBC attributes a 
primacy to the business decisions taken by creditors 
acting as a collective body, on the premise that the 
timely resolution of corporate insolvency is necessary 
to ensure the growth of credit markets and encourage 
investment. Fourth, in its diverse provisions, the IBC 
ensures that the interests of corporate enterprises are 
not conflated with the interests of their promoters; 
the economic value of corporate structures is 
broader in content than the partisan interests of their 
managements. These salutary objectives of the IBC can 
be achieved if the integrity of the resolution process is 
placed at the forefront. Primarily, the IBC is a legislation 
aimed at reorganisation and resolution of insolvencies. 
Liquidation is a matter of last resort. These objectives can 
be achieved only through a purposive interpretation which 
requires courts, while infusing meaning and content to its 
provisions, to ensure that the problems which beset the 
earlier regime do not enter through the backdoor through 
disingenuous stratagems.”
(emphasis supplied)
39.	 From the above, the following guiding
principles emerge, which 
we must keep in mind while determining the issues raised in the 
present appeal:
a.	
A significant change brought about by the IBC was the 
consolidation of the pre-existing fragmented insolvency 
framework, The aim was to eliminate parallel proceedings by 
various creditors before different fora, given that all creditors 
would be a part of a single insolvency process under the IBC; 
b.	
The above consolidation also sought to implement the 
principle of ‘collective distribution’, where the interests of all 
stakeholders were considered. The CIRP envisaged by the 
IBC is premised on the principle that each creditor of the
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same class should receive a share that is proportionate to 
the debt owed to him; 
c.	
IBC must not be used as a tool for coercion and debt recovery 
by individual creditors. Improper use of the IBC mechanism by 
a creditor includes using insolvency as a substitute for debt 
enforcement or attempting to obtain preferential payments 
by coercing the debtor using insolvency proceedings. That 
the mechanism under the IBC must not be used as a money 
recovery mechanism has been reiterated in a consistent line 
of precedent by this Court;25 and
d.	
The interests of the corporate debtor must be detached from 
those of its promoters/those who are in management. A 
“recalcitrant management”26 must be prevented from taking 
advantage of undue delays and preventing an inevitable 
insolvency. In other words, as noted by this Court in Arun 
Kumar Jagatramka (supra), the economic value of corporate 
structures is broader than the partisan interests of their 
management.
b.	
Nature of the proceedings after admission of the application 
40.	 Chapter II of the IBC provides that CIRP can be invoked in three 
ways: (i) by a financial creditor under Section 7; (ii) by an operational 
creditor under Section 9; and (iii) by a corporate debtor itself under 
Section 10.27 Section 5(11) of the IBC defines the “initiation date” 
as the date on which the financial creditor, operational creditor or 
corporate applicant makes an application to the
NCLT for initiating 
insolvency proceedings, including CIRP. This is distinct from the 
“insolvency commencement date” which is defined in Section 5(12) 
of the IBC as the date of admission of an application for initiating 
CIRP by the NCLT under Sections 7, 9 or 10, as the case may be. 
41.	 Once the application is admitted, the CIRP commences and the NCLT 
inter alia declares a moratorium; issues a public pronouncement 
25	
Swiss Ribbons, para 28; 
26	
Mobilox, para 36. 
27	
Section 6, IBC reads: “6. Persons who may initiate corporate insolvency resolution process. – 
Where any corporate debtor commits a default, a financial creditor, an operational creditor or the 
corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate 
debtor in the manner as provided under this Chapter.”
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
of the initiation of CIRP and a call for submission of claims; and 
appoints an IRP.28 Once an IRP is appointed, the affairs of the 
corporate debtor are managed by the IRP,29 who inter alia receives 
and collates all the claims submitted by the creditors pursuant to 
the public announcement of the CIRP.30 After the collation of claims 
received and the determination of the financial position of the 
corporate debtor, the IRP shall constitute a CoC, which consists of 
all the financial creditors of the corporate debtor.31 The CoC appoints 
a Resolution Professional32 and the CIRP process continues, as 
prescribed. 
42.	 From this scheme of Chapter II of the IBC, it appears that the 
admission of an application is a significant event that alters the 
nature of the proceedings, and the stakeholders involved. Initially, 
when the petition is filed by the financial creditor, operational creditor 
or corporate applicant, as the case may be, the proceedings are in 
personam and the only relevant stakeholders are the applicant creditor 
and the corporate debtor. However, once the petition is admitted and 
CIRP is initiated, several significant changes take place, including 
the transfer of the management of the affairs of the corporate debtor 
28	
Sections 13, 14, 15, 16, IBC. 
29	
Section 17, IBC reads “17. Management of affairs of corporate debtor by interim resolution 
professional. - (1) From the date of
appointment of the interim resolution professional, - 
(a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional; 
(b) the powers of the board of directors or the partners of the corporate debtor, as the case may be, shall 
stand suspended and be exercised by the interim resolution professional; 
(c) the officers and managers of the corporate debtor shall report to the interim resolution professional 
and provide access to such documents and records of the corporate debtor as may be required by the 
interim resolution professional; 
(d) the financial institutions maintaining accounts of the corporate debtor shall act on the instructions of 
the interim resolution professional in relation to such accounts and furnish all information relating to the 
corporate debtor available with them to the interim resolution professional. 
(2) The interim resolution professional vested with the management of the corporate debtor, shall- 
(a) act and execute in the name and on behalf of the corporate debtor all deeds, receipts, and other 
documents, if any; 
(b)take such actions, in the manner and subject to such restrictions, as may be specified by the Board; 
(c)have the authority to access the electronic records of corporate debtor from information utility having 
financial information of the corporate debtor; 
(d)have the authority to access the books of account, records and other relevant documents of corporate 
debtor available with
government authorities, statutory auditors, accountants and such other persons as 
may be specified; and
(e) be responsible for complying with the requirements under any law for the time being in force on behalf 
of the corporate debtor.”
30	
Section 18(b), IBC. 
31	
Section 21, IBC. 
32	
“RP”
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to the IRP, the declaration of the moratorium, and the collation of 
the claims against the corporate debtor. Therefore, the proceedings 
now change character – they become in rem and are no longer the 
preserve of only the applicant creditor and the corporate debtor 
and even creditors who were not the original applicants, become 
necessary stakeholders. 
43.	 A three-judge Bench of this Court in Indus Biotech (P) Ltd. v. Kotak 
India Venture (Offshore) Fund33 adjudicated on the question of the 
stage at which the proceedings under the IBC attain the status of in 
rem and create third-party rights for all creditors. This Court held that 
the trigger point is not the filing of the application, but the admission 
of the application, and observed as follows:
“17. The procedure contemplated will indicate that before 
the adjudicating authority is satisfied as to whether the 
default has occurred or not, in addition to the material placed 
by the financial creditor, the corporate debtor is entitled to 
point out that the default has not occurred and that the debt 
is not due, consequently to satisfy the adjudicating authority 
that there is no default. In such exercise undertaken by the 
adjudicating authority if it is found that there is default, the 
process as contemplated under sub-section (5) of Section 7 
of IB Code is to be followed as provided under sub-section 
(5)(a); or if there is no default the adjudicating
authority 
shall reject the application as provided under sub-section 
(5)(b) to Section 7 of IB Code. In that circumstance if the 
finding of default is recorded and the adjudicating authority 
proceeds to admit the application, the corporate insolvency 
resolution process commences as provided under sub-
section (6) and is required to be processed further. In 
such event, it becomes a proceeding in rem on the 
date of admission and from that point onwards the 
matter would not be arbitrable. The only course to be 
followed thereafter is the resolution process under IB 
Code. Therefore, the trigger point is not the filing of the 
application under Section 7 of IB Code but admission 
of the same on determining default.
33	
[2021] 7 SCR 112 : (2021) 6 SCC 436
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26. […] On admission, third-party right is created in 
all the creditors of the corporate debtors and will have 
erga omnes effect. The mere filing of the petition and 
its pendency before admission, therefore, cannot be 
construed as the triggering of a proceeding in rem. 
Hence, the admission of the petition for consideration 
of the corporate insolvency resolution process is the 
relevant stage which would decide the status and the 
nature of the pendency of the proceedings and the mere 
filing cannot be taken as the triggering of the insolvency 
process.”
44.	 In summary, the scheme of the IBC under Chapter II gives rise to 
two significant principles:
a.	
Once the petition is admitted, the proceedings are no longer 
the preserve of the applicant creditor and the debtor. They now 
become in rem and all creditors of the corporate debtor become 
stakeholders in the process; and
b.	
Once the petition is admitted, the management of the affairs 
of the corporate debtor is vested in the IRP and eventually, in 
the RP. Thus, the corporate debtor no longer exists in the form 
that it did, before the admission of the petition. Once CIRP 
is initiated, the interests of the erstwhile management of the 
corporate debtor must be distinguished from the interests of 
the corporate debtor.
ii.	
Legal framework for withdrawal and settlement of claims
a.	
Evolution of the legal framework
45.	 Introduced less than a
decade ago, the IBC and the various rules 
and regulations promulgated under the Act constitute a relatively 
nascent legal framework. On several occasions, the legislature 
and the executive have responded to the lacunae in the framework 
identified by this Court and sought to fill the gaps by legislating, 
in the form of amendments to the IBC or promulgating rules or 
regulations, if necessary. The evolution of the legal framework 
in relation to the withdrawal of CIRP after the admission of an 
application moved by a creditor is a classic example of this delicate 
coordination.
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46.	 Under Rule 8 of the Insolvency and Bankruptcy (Application to 
Adjudicating Authority) Rules, 2016,34 the NCLT may permit the 
withdrawal of applications made by a creditor (under Sections 7, 
9 or 10) on a request by the applicant before the admission of the 
application.35 When the IBC was originally enacted in 2016, it did not 
contain any provisions, in the text of the Act or its allied rules and 
regulations, for the withdrawal of CIRP after the application had been 
admitted. Although there was no express provision in this regard, in 
several instances, this Court invoked its powers under Article 142 of 
the Constitution and permitted withdrawal of the CIRP on account 
of a settlement between the creditor and the corporate debtor after 
the application had been admitted by the NCLT.36 
47.	 In one such decision of this Court, namely, Lokhandwala Kataria 
Construction (P) Ltd. v. Nisus Finance and Investment Managers 
LLP,37 a two-judge bench of this Court invoked its power under Article 
142 to record the settlement of the parties and allow the compromise 
between the creditor and the corporate debtor after the admission 
of the concerned application. While doing so, this Court also prima 
facie agreed with the proposition that in view of Rule 8 of the CIRP 
Rules, the NCLAT cannot use its inherent powers under Rule 11 of 
the NCALT Rules 2016 to allow a settlement or withdrawal after the 
admission of the
application. 
48.	 The above position was followed by the same Bench of this Court 
in Uttara Foods & Feeds (P) Ltd. v. Mona Pharmachem,38 while 
allowing another settlement between the parties under Article 142. 
However, on this occasion, the bench also observed that instead of 
all such orders coming to this Court to utilize its powers under Article 
142, the relevant rules may be amended to account for cases where 
an agreement has been reached after admission of the application. 
This Court observed as follows: 
“2. … this Bench had observed that in view of Rule 8 of 
the Insolvency and Bankruptcy (Application to Adjudicating 
34	
“CIRP Rules”
35	
“8. Withdrawal of application. —The Adjudicating Authority may permit withdrawal of the application 
made under rules 4, 6 or 7, as the case may be, on a request made by the applicant before its admission.”
36	
Mothers Pride Dairy India Private Limited v. Portrait Advertising and Marketing Private Limited, 2017 
SCC OnLine SC 1789; Uttara Foods & Feeds (P) Ltd. v. Mona Pharmachem (2018) 15 SCC 587. 
37	
(2018) 15 SCC 589
38	
(2018) 15 SCC 587
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
Authority) Rules, 2016, the National Company Law 
Appellate Tribunal prima facie could not avail of the inherent 
powers recognised by Rule 11 of the National Company 
Law Appellate Tribunal Rules, 2016 to allow a compromise 
to take effect after admission of the insolvency petition. 
We are of the view that instead of all such orders 
coming to the Supreme Court as only the Supreme 
Court may utilise its powers under Article 142 of the 
Constitution of India, the relevant Rules be amended by 
the competent authority so as to include such inherent 
powers. This will obviate unnecessary appeals being 
filed before this Court in matters where such agreement 
has been reached. On the facts of the present case, we 
take on record the settlement between the parties and set 
aside the NCLT order …”
49.	 Against this backdrop, the Ministry of Corporate Affairs of the 
Government of India set up the Insolvency Law Committee,39 to 
address the early teething challenges arising from the implementation 
of the IBC.40 The ILC Report, submitted on 26 March 2018, also dealt 
with the issue of withdrawal of CIRP proceedings and discussed 
the existing practice of this Court of granting “judicial permission” 
for withdrawal of CIRP after the admission of the application of the 
creditor. In this context, the report discussed the objectives of the IBC, 
drawing from the report of the Bankruptcy Law Reforms Committee
which preceded the enactment of the IBC, and concluded that: 
“29.1 …it was agreed that once the CIRP is initiated, it 
is no longer a proceeding only between the applicant 
creditor and the corporate debtor but is envisaged to be 
a proceeding involving all creditors of the debtor. The 
intent of the Code is to discourage individual actions 
for enforcement and settlement to the exclusion of the 
general benefit of all creditors.”
(emphasis supplied)
50.	 The ILC Report found that in several cases, a settlement may be 
reached amongst “all creditors and the debtor” for withdrawal, and 
39	
“ILC”
40	
“ILC Report”
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not only between the individual applicant creditor and the debtor. In 
light of this, the ILC unanimously agreed that the relevant rules may 
be amended to provide for withdrawal post-admission if the CoC 
approved of such an action by a voting share of ninety per cent. 
Significantly, the report states that the ILC specifically discussed 
and concluded that Rule 11 of the NCLAT Rules, 2016 may not be 
adopted for withdrawal of CIRP, and instead Rule 8 of the CIRP 
Rules may be appropriately amended. The observations in the ILC 
Report on this aspect are as follows: 
“29.2. On a review of the multiple NCLT and NCLAT 
judgments in this regard, the consistent pattern that 
emerged was that a settlement may be reached amongst 
all creditors and the debtor, for the purpose of a withdrawal 
to be granted, and not only the applicant creditor and the 
debtor. On this basis read with the intent of the Code, 
the Committee unanimously agreed that the relevant 
rules may be amended to provide for withdrawal post 
admission if the CoC approves of such action by a voting 
share of ninety per cent. It was specifically discussed 
that rule 11 of the National Company Law Tribunal Rules, 
2016 may not be adopted for this aspect of CIRP at 
this stage (as observed by the Hon’ble Supreme Court 
in the case of Uttara Foods and Feeds Private Limited 
v. Mona Pharmacem) and even otherwise, as the issue 
can be specifically addressed by
amending rule 8 of the 
CIRP Rules.”
51.	 Accepting the recommendation of the ILC, the legislature introduced 
Section 12A in the IBC by the Insolvency and Bankruptcy (Second 
Amendment) Act, 2018 with effect from 6 June 2018.41 It reads as 
follows: 
“12A. Withdrawal of application admitted under  
section 7, 9 or 10. – 
The Adjudicating Authority may allow the withdrawal 
of application admitted under section 7 or section 9 or 
section 10, on an application made by the applicant with the 
41	
Act No. 26 of 2018.
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approval of ninety per cent. voting share of the committee 
of creditors, in such manner as may be specified.”
(emphasis supplied)
52.	 The provision provides for the withdrawal of an application under 
Sections 7, 9 and 10 after it has been admitted, with the approval 
of ninety-percent voting share of the CoC. Evidently, Section 12A 
was made more stringent in comparison to Section 30(4) of the 
IBC, which pertains to approval of the Resolution Plan by the CoC. 
Whereas under Section 30(4) of the IBC, the voting share of the 
CoC for approving the Resolution Plan is sixty-six percent, the 
requirement under Section 12A of the IBC for withdrawal of CIRP 
is ninety percent. The reason for this divergence and high threshold 
appears to be rooted in the reasoning provided in the ILC report 
that once an application is admitted it is no longer a proceeding 
only between the applicant creditor and the corporate debtor but is 
a proceeding involving all creditors of the debtor. Significantly, the 
text of Section 12A only details the procedure for the withdrawal of 
the application after the formation of the CoC (with ninety percent of 
the voting share), but is silent about the withdrawal of an application 
after the application is admitted, but before the CoC is formed. 
53.	 With the introduction of Section 12A in the IBC, the CIRP Regulations 
were also amended to include Regulation 30A which delineated
the 
detailed procedure to withdraw an application under Section 12A.42 
At the time of its introduction, the regulation read as follows: 
“30-A. Withdrawal of application.— (1) An application 
for withdrawal under Section 12-A shall be submitted 
to the interim resolution professional or the resolution 
professional, as the case may be, in Form FA of the 
Schedule before issue of invitation for expression of interest 
under Regulation 36-A.
(2) The application in sub-regulation (1) shall be 
accompanied by a bank guarantee towards estimated cost 
incurred for purposes of clauses (c) and (d) of Regulation 
31 till the date of application.
42	
IBBI (CIRP) (Third Amendment) Regulations, 2018 vide Notification No. IBBI/2018-19/GN/REG031, 
dated 3rd July, 2018, w.e.f. 04.07.2018.
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(3) The committee shall consider the application made 
under sub-regulation (1) within seven days of its constitution 
or seven days of receipt of the application, whichever is 
later.
(4) Where the application is approved by the committee 
with ninety per cent voting share, the resolution professional 
shall submit the application under sub-regulation (1) to the 
adjudicating authority on behalf of the applicant, within 
three days of such approval.
(5) The adjudicating authority may, by order, approve the 
application submitted under sub-regulation (4).”
54.	 Regulation 30A(1), as it stood originally, required that an application for 
withdrawal shall be submitted to the IRP or the RP in the prescribed 
form, before the invitation for expression of interest under Regulation 
30A. It did not provide the procedure for withdrawal after the invitation 
of expression of interest had been issued. Regulation 30A(2) provided 
that the application for withdrawal shall be accompanied by a bank 
guarantee towards the specified estimated costs. Regulation 30A(3) 
mandated that the CoC must consider the application within seven 
days of its constitution or the receipt of the application, whichever is 
later. Finally, Regulation 30A(4) provided that once the CoC approved 
the application with ninety percent voting share, the RP shall submit 
the application to the NCLT on behalf of the applicant, within three 
days of the approval.
Finally, under Regulation 30A(5), the NCLT 
could approve the application submitted by an order. 
55.	 Notably, akin to Section 12A, Regulation 30A in its original form, 
was silent about withdrawal in cases where the application had been 
admitted, but the CoC had not been formed. Similarly, Regulation 
30A(1) only spoke of withdrawal before the invitation of expression 
of interest had been issued and there was no provision which 
provided for withdrawal after it had been issued. Both these gaps 
were identified in subsequent judgements of this Court. 
56.	 In Brilliant Alloy Private Limited vs S Rajagopal and Ors,43 a 
two-judge bench of this Court observed that the requirement in 
Regulation 30A, as it stood then, that the application must be made 
43	
(2022) 2 SCC 544
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before the issuance of an invitation for expression of interest was 
only directory. The regulation, it was held, has to be read along with 
Section 12A, which does not contain any bar on withdrawal after the 
issuance of an invitation for expression of interest. 
57.	 The constitutional validity of various provisions of the IBC, including 
Section 12A was challenged before this Court. In Swiss Ribbons 
(supra), a two-judge bench of this Court, speaking through Justice 
Rohinton Fali Nariman, inter alia upheld the constitutionality of 
Section 12A. One of the questions that arose before this Court, in this 
context, was what happens if withdrawal is sought after admission of 
the application, but before the CoC is constituted. This Court observed: 
“82. It is clear that once the Code gets triggered by 
admission of a creditor’s petition under Sections 7 to 9, the 
proceeding that is before the adjudicating authority, 
being a collective proceeding, is a proceeding in rem. 
Being a proceeding in rem, it is necessary that the 
body which is to oversee the resolution process must 
be consulted before any individual corporate debtor 
is allowed to settle its claim. A question arises as to 
what is to happen before a Committee of Creditors is 
constituted (as per the timelines that are specified, a 
Committee of Creditors can be appointed at any time 
within 30 days from the date of appointment of the
interim resolution professional). We make it clear that 
at any stage where the Committee of Creditors is not 
yet constituted, a party can approach NCLT directly, 
which Tribunal may, in exercise of its inherent powers 
under Rule 11 of NCLT Rules, 2016, allow or disallow 
an application for withdrawal or settlement. This will 
be decided after hearing all the parties concerned and 
considering all relevant factors on the facts of each case.
83. The main thrust against the provision of Section 
12-A is the fact that ninety per cent of the Committee of 
Creditors has to allow withdrawal. This high threshold 
has been explained in the ILC Report as all financial 
creditors have to put their heads together to allow 
such withdrawal as, ordinarily, an omnibus settlement 
involving all creditors ought, ideally, to be entered into.
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This explains why ninety per cent, which is substantially 
all the financial creditors, have to grant their approval to 
an individual withdrawal or settlement. In any case, the 
figure of ninety per cent, in the absence of anything further 
to show that it is arbitrary, must pertain to the domain of 
legislative policy, which has been explained by the Report 
(supra). Also, it is clear, that under Section 60 of the 
Code, the Committee of Creditors do not have the last 
word on the subject. If the Committee of Creditors 
arbitrarily rejects a just settlement and/or withdrawal 
claim, NCLT, and thereafter, NCLAT can always set 
aside such decision under Section 60 of the Code. For 
all these reasons, we are of the view that Section 12-A 
also passes constitutional muster.”
(emphasis supplied)
58.	 From the above observations of this Court in Swiss Ribbons (supra), 
the following positions of law may be deduced: 
a.	
Once the petition instituted by a creditor is admitted, the 
proceedings before the NCLT become a ‘collective proceeding’ 
or a proceeding in rem. Thus, the body which oversees the 
resolution process, i.e. CoC must be consulted before allowing 
the claim to be settled;
b.	
This Court recognized that there was a lacuna in relation to cases 
where the CoC had not been formed. Accordingly, it was held 
that, in such cases, the party can approach the NCLT directly, 
and the NCLT may exercise its inherent powers
under Rule 11 
to allow or disallow the application for settlement/withdrawal. 
However, given the in rem nature of the proceedings, such an 
application must be decided only after hearing all the parties 
concerned and considering the relevant factors in the case; 
c.	
This high threshold of a ninety-percent voting share of the CoC 
is not arbitrary. The idea is that the financial creditors have to 
put their heads together to allow such withdrawal; and 
d.	
Under Section 60 of the IBC, the decision of the CoC to reject 
or accept the settlement claim can be challenged before the 
NCLT and then, the NCLAT.
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59.	 In response to the lacunae identified by this Court in Swiss Ribbons 
(supra) and Brilliant Alloy Private Limited (supra), an amendment 
was made to Regulation 30A of the CIRP Regulations.44 This 
amendment came into effect on 25 July 2019 and Regulation 30A 
in its present form reads as follows:
“30A. Withdrawal of application. 
(1) An application for withdrawal under section 12A may 
be made to the Adjudicating Authority – 
(a) before the constitution of the committee, by the applicant 
through the interim resolution professional; 
(b) after the constitution of the committee, by the applicant 
through the interim resolution professional or the resolution 
professional, as the case may be: 
Provided that where the application is made under clause 
(b) after the issue of invitation for expression of interest 
under regulation 36A, the applicant shall state the reasons 
justifying withdrawal after issue of such invitation. 
(2) The application under sub-regulation (1) shall be made 
in Form FA of the Schedule-I accompanied by a bank 
guarantee- 
(a) towards estimated expenses incurred on or by the 
interim resolution professional for purposes of regulation 
33, till the date of filing of the application under clause (a) 
of sub- regulation (1); or 
(b) towards estimated expenses incurred for purposes 
of clauses (aa), (ab), (c) and (d) of regulation 31, till the 
date of filing of the application
under clause (b) of sub-
regulation (1).
(3) Where an application for withdrawal is under clause (a) 
of sub-regulation (1), the interim resolution professional 
shall submit the application to the Adjudicating Authority 
on behalf of the applicant, within three days of its receipt. 
44	
Notification No. IBBI/2019-20/GN/REG048, dated 25th July, 2019 (w.e.f. 25-07-2019)
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(4) Where an application for withdrawal is under clause 
(b) of sub-regulation (1), the committee shall consider the 
application, within seven days of its receipt. 
(5) Where the application referred to in sub-regulation (4) 
is approved by the committee with ninety percent voting 
share, the resolution professional shall submit such 
application along with the approval of the committee, to 
the Adjudicating Authority on behalf of the applicant, within 
three days of such approval. 
(6) The Adjudicating Authority may, by order, approve the 
application submitted under sub-regulation (3) or (5). 
(7) Where the application is approved under sub-regulation (6), 
the applicant shall deposit an amount, towards the actual 
expenses incurred for the purposes referred to in clause (a) 
or clause (b) of sub-regulation (2) till the date of approval 
by the Adjudicating Authority, as determined by the interim 
resolution professional or resolution professional, as the 
case may be, within three days of such approval, in the 
bank account of the corporate debtor, failing which the 
bank guarantee received under sub-regulation (2) shall be 
invoked, without prejudice to any other action permissible 
against the applicant under the Code.”
60.	 Regulation 30A (1) now provides for the procedure to make an 
application for withdrawal before the NCLT under Section 12A, 
both before and after the constitution of the CoC. Sub-clause (a) 
of
Regulation 30A (1) states that in cases where the CoC has 
not been constituted, the applicant may place an application for 
withdrawal before the NCLT, through the IRP. Similarly, sub-clause 
(b) of Regulation 30A (1) states that in cases where the CoC is 
constituted, the applicant may place an application for withdrawal 
before the NCLT, through the IRP or the RP, as the case may be. 
In essence, at both stages – before and after the constitution of the 
CoC – the application for withdrawal may only be made through 
the person appointed to oversee the insolvency proceedings, i.e. 
the IRP or the RP. 
61.	 The proviso to Regulation 30A (1) provides that when the application 
is made after the CoC has been constituted and after the invitation for
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
expression of interest has been issued, the applicant shall state the 
reasons for withdrawal at this stage. In essence, the regulation in its 
amended form, deviates from its earlier form by also responding to 
the decision of this Court in Brilliant Alloy Private Limited (supra). 
Unlike the unamended regulation, the regulation acknowledges the 
possibility of withdrawal even after the invitation for expression has 
been issued. However, it mandates that an application for withdrawal 
in such cases must be accompanied by reasons. 
62.	 Regulation 30A (2) provides that the application must be made in 
the manner prescribed in Form FA of Schedule-I,45 and must be 
accompanied by a bank guarantee towards the specified expenses. 
Regulation 30A(3) provides that in cases where the application for 
withdrawal is moved before the constitution of the CoC, the IRP 
shall submit the application to the NCLT on behalf of the applicant 
within three days of receipt. Regulations 30A (4) and (5) deal with 
the situation where the CoC has already been constituted. They 
provide that the CoC shall consider the application within seven 
days of receipt, and subsequently, if the application is approved by 
45	
171 [FORM FA
APPLICATION FOR WITHDRAWAL OF CORPORATE INSOLVENCY RESOLUTION PROCESS
[Under Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution 
Process for Corporate Persons)
Regulations, 2016]
[Date]
To
The Adjudicating Authority
[Through the Interim Resolution Professional / Resolution Professional]
[name of corporate debtor]
Subject: Withdrawal of Application admitted for corporate insolvency resolution process of 
[name of corporate debtor]
I, [Name of applicant], had filed an application bearing [particulars of application, i.e, diary number/ case 
number] on [Date of filing] before the Adjudicating Authority under [Section 7 / Section 9/ Section 10] 
of the Insolvency and Bankruptcy Code, 2016. The said application was admitted by the Adjudicating 
Authority on [date] bearing [case number].
2. I hereby withdraw the application bearing [particulars of application, i.e, diary number/ case number] 
filed by me before the Adjudicating Authority under [Section 7 / Section 9/Section 10] of the Insolvency 
and Bankruptcy Code, 2016.’
3. I attach the required bank guarantee as per sub-regulation (2) of regulation 30A.
(Signature of the applicant)
Date:
Place:
[Note: In the case of company or limited liability partnership, the declaration and verification shall be 
made by the director/manager/secretary/designated partner and in the case of other entities, an officer 
authorised for the purpose by the entity]”.]
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the CoC with a ninety-percent voting share, the RP must submit the 
application with the approval to the NCLT within three days of the 
approval. Finally, regulation 30A(6) provides that on the receipt of 
the application under both mechanisms (before the CoC and after), 
the NCLT may pass an order approving the application submitted 
by the RP or IRP, as the case may be. 
b.	
Insights from the evolution of the legal framework
63.	 In essence, after a series of deliberations by the legislature, the 
executive and nudges by this Court, the framework created by Rule 8 
of the NCLT Rules and Section 12A of the IBC read with Rule 30A 
of the CIRP Regulations lays down an exhaustive procedure for the 
withdrawal of an application filed by creditors under Sections 7, 9, 
or 10 of the IBC. Withdrawal may be sought at four stages, all of 
which have a procedure prescribed under the existing framework. 
These may be summarized as follows: 
i.	
Before the application under Sections 7, 9 or 10 is admitted 
by the NCLT: Such cases are squarely covered by Rule 8 of 
the NCLT Rules, which requires that the applicant approach the 
NCLT directly. The NCLT may then pass an order permitting 
the withdrawal of the application. At this stage, as the CIRP 
process has not been initiated, the proceedings are still in 
personam, as between the applicant creditor and the corporate 
debtor. Therefore, while approving the withdrawal at this stage,
the NCLT may restrict its enquiry to only hear the applicant 
creditor and corporate debtor, and other potential creditors are 
not stakeholders at this stage. 
ii.	
After an application under Sections 7, 9, or 10 is admitted, 
but before the CoC has been constituted: Although Section 
12A continues to be silent on this aspect, after the decision in 
Swiss Ribbons (supra), Regulation 30A was amended to provide 
for this eventuality. An application for withdrawal in such cases 
may be made by the applicant through the IRP.46 The IRP will 
then place the application before the NCLT, which may pass 
an order either approving or rejecting the application. As noted 
above, once the application has been admitted, the proceedings 
46	
Regulation 30A (1), CIRP Regulations, 2016.
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are no longer the sole preserve of the applicant creditor and 
the corporate debtor. They are now in rem and at this stage, 
the NCLT must hear the concerned parties and consider all 
relevant factors before approving or rejecting the application 
for withdrawal. The NCLT being a quasi-judicial body, must not 
act as a mere post office, which stamps and approves every 
settlement agreement, without application of judicial mind. 
iii.	
After an application under Section 7, 9 or 10 is admitted, the 
CoC has been constituted and the invitation for expression 
of interest has not been issued: Section 12A read with 
Regulation 30A provides exhaustively for this scenario. In such 
cases, the application for withdrawal is to be placed before the 
NCLT, through the IRP or the RP. The application is first placed 
before the CoC and after ascertaining approval with a ninety 
percent voting share, the RP shall submit the application to 
the NCLT. 
iv.	
After an application under Section 7, 9 or 10 is admitted, the 
CoC has been formed and the invitation for expression of 
interest has been issued: The procedure is the same as that 
detailed in (iii) above, with the added requirement stemming from 
the proviso to Regulation 30A (1). in such cases, the applicant 
must state the reasons for withdrawal at this belated stage.
64.	 Not only is there an exhaustive framework to deal with withdrawal 
and settlement, but
the evolution of the law and the creation of an 
comprehensive framework indicates an attempt to reduce reliance on 
discretionary powers. As detailed above, the IBC and the allied rules 
and regulations, in their original form did not provide any procedure for 
the settlement/withdrawal of claims after admission of the application 
by the creditor. This Court was compelled to invoke Article 142 in 
decisions such as Lokhandwala Kataria Construction (supra) 
and Uttara Foods & Feeds (P) Ltd. (supra). To reduce reliance 
on Article 142, Section 12A and Regulation 30A were introduced to 
provide a detailed procedure for such cases. In fact, the ILC report 
which led to the inclusion of Section 12A specifically discussed and 
rejected the proposition that Rule 11 can instead be used for this 
purpose. Next, this Court in Swiss Ribbons (supra) held that since 
there was no prescribed framework to allow settlement/withdrawal 
of claims after admission of the application but before the CoC was
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constituted, Rule 11 of the NCLT Rules may be invoked. In response 
to this, to reduce reliance on the inherent powers under Rule 11 and 
provide certainty, necessary amendments were made to Regulation 
30A. There is now a detailed procedure to deal with withdrawal or 
settlement at both stages post admission – before and after the CoC 
is constituted. In view of this detailed framework, the requirement to 
invoke discretionary power such as Rule 11 of the NCLT Rules, or 
Rule 11 of the NCLAT Rules or even the power of this Court under 
Article 142 no longer arises.
65.	 Mr Tushar Mehta, Senior Counsel for the second respondent, has 
sought to contend that the requirement under Regulation 30A (1) 
to move an application before the NCLT through the IRP, in cases 
where the CoC is not constituted, is a mere technicality which can 
be dispensed with. The logic he advances is that the regulation 
does not require adjudication by the NCLT about the factum of the 
settlement, the mode of settlement or adjudication on any other 
ground. His submission is that Regulation 30A (1) only requires that 
the withdrawal application be submitted to the IRP in the prescribed 
Form FA, which is then forwarded to the NCLT to mechanically 
approve the settlement. At this stage, according to him, the NCLT 
is not required to hear any other parties, but only approve the 
application and thus, whether the application is submitted through 
the
IRP or whether it is before the NCLT or the NCLAT, is a mere 
technicality. 
66.	 We do not concur with the above understanding for two broad reasons. 
a.	
Firstly, that the application is to be submitted by the IRP 
rather than the parties themselves is not a distinction without 
difference. As noted above, once the application is admitted and 
CIRP is initiated, it is the IRP who takes charge of the affairs 
of the corporate debtor. The proceedings become collective 
proceedings and the interests of the former management of 
the corporate debtor, become disjunct from the interest of the 
corporate debtor. Therefore, the parties (such as the former 
management of the corporate debtor) must submit their 
application for withdrawal through the IRP who is now the 
person in control of the insolvency proceedings. To subvert 
this requirement would run contrary to the scheme of the IBC 
and the underlying principles discussed in this judgment; and
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
b.	
Secondly, the NCLT cannot be considered a post office that 
merely puts a stamp on the withdrawal application submitted 
by the parties through the IRP. The ILC Report, in response to 
which, the parent provision, i.e. Section 12A was introduced in 
the IBC specifically discussed the possibility of the creditors, 
apart from the applicant creditor agreeing to a settlement as 
the underlying reason to permit withdrawal even after initiation 
of the CIRP. It was never fathomed by the ILC that withdrawal 
of claims would remain a unilateral process, even though the 
application is admitted and CIRP has been initiated. Similarly, 
this Court in Swiss Ribbons (supra), in response to which 
Regulation 30A was amended, specifically observed that in 
cases where withdrawal is sought after initiation of CIRP, 
but before the CoC is constituted, the NCLT must decide on 
the application after “hearing all the parties concerned and 
considering all relevant factors on the facts of each case.” 
Therefore, the NCLT does conduct an adjudicatory exercise 
when the application for withdrawal is placed before it, and the 
procedure is not a mere technicality. 
iii.	
Scope of ‘Inherent Powers’ under Rule 11
67.	 Section 151 of the Code of Civil Procedure47 reads as follows: 
“151. Saving of inherent powers of Court.—Nothing in 
this Code shall be deemed to limit or otherwise affect the 
inherent power of the Court to
make such orders as may 
be necessary for the ends of justice or to prevent abuse 
of the process of the Court.”
68.	 Rule 11 of the NCLT Rules 2016 and Rule 11 of the NCLAT Rules 
2016, which preserve the inherent powers of the NCLT and the 
NCLAT respectively, mirror Section 151 of the CPC and read as 
follows: 
“11. Inherent powers.- Nothing in these rules shall be 
deemed to limit or otherwise affect the inherent powers of 
the Appellate Tribunal to make such orders or give such 
directions as may be necessary for meeting the ends of 
47	
“CPC”
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justice or to prevent abuse of the process of the Appellate 
Tribunal.”
69.	 In a consistent line of precedent, this Court has held that ‘inherent 
powers’ may be exercised in cases where there is no express 
provision under the legal framework. However, such powers cannot be 
exercised in contravention of, conflict with or in ignorance of express 
provisions of law. We may helpfully refer to the observations of a 
two-judge bench of this Court in one such case. In Ram Chand and 
Sons Sugar Mills (P) Ltd. v. Kanhayalal Bhargava,48 a two-judge 
bench of this Court, speaking through Justice K Subba Rao (as the 
learned chief Justice then was), opined: 
“5. … Having regard to the said decisions, the scope 
of the inherent power of a court under Section 151 of 
the Code may be defined thus: The inherent power of a 
court is in addition to and complementary to the powers 
expressly conferred under the Code. But that power will 
not be exercised if its exercise is inconsistent with, or 
comes into conflict with, any of the powers expressly or by 
necessary implication conferred by the other provisions of 
the Code. If there are express provisions exhaustively 
covering a particular topic, they give rise to a necessary 
implication that no power shall be exercised in 
respect of the said topic otherwise than in the manner 
prescribed by the said provisions. Whatever limitations 
are imposed by construction on the provisions of
Section 
151 of the Code, they do not control the undoubted 
power of the Court conferred under Section 151 of the 
Code to make a suitable order to prevent the abuse 
of the process of the Court.”
(emphasis supplied)
70.	 When a procedure has been prescribed for a particular purpose 
exhaustively, no power shall be exercised otherwise than in the 
manner prescribed by the said provisions. In such cases, the court 
must be circumspect in invoking its ‘inherent powers’ to deviate from 
48	
[1966] 3 SCR 856 : 1966 SCC OnLine SC 215.
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
the prescribed procedure. If such deviation is made, the court must 
justify why this was necessary to “prevent the abuse of the process 
of the Court”. 
71.	 The need to be circumspect while invoking “inherent powers”, when 
there is an exhaustive legal framework is amplified in the context of 
a legislation like the IBC. In Ebix Singapore (P) Ltd. vs. Educomp 
Solutions Ltd. (CoC),49 a two-judge bench of this Court, speaking 
through one of us (DY Chandrachud, J), affirmed this position and 
observed as follows:
“Any claim seeking an exercise of the adjudicating 
authority’s residuary powers under Section 60(5)(c) IBC, 
NCLT’s inherent powers under Rule 11 of the NCLT Rules 
or even the powers of this Court under 
Article 142 of the Constitution must be closely scrutinized 
for broader compliance with the insolvency framework and 
its underlying objective. The adjudicating mechanisms 
which have been specifically created by the statute, 
have a narrowly defined role in the process and must be 
circumspect in granting reliefs that may run counter to 
the timeliness and predictability that is central to the IBC. 
Any judicial creation of a procedural or substantive 
remedy that is not envisaged by the statute would not 
only violate the principle of separation of powers, but 
also run the risk of altering the delicate coordination 
that is designed by the IBC framework and have grave 
implications on
the outcome of the CIRP, the economy 
of the country and the lives of the workers and other 
allied parties who are statutorily bound by the impact 
of a resolution or liquidation of a Corporate Debtor.”
(emphasis supplied)
E.	
Application to the instant case
72.	 In the preceding section, we have analyzed the law with regard 
to (i) the principles governing IBC relevant to contextualize the 
consequences of withdrawing CIRP; (ii) the nature of the proceedings 
after admission of an application by a creditor; (iii) the evolution of the 
49	
[2021] 14 SCR 321 : (2022) 2 SCC 401
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legal framework for the withdrawal of CIRP or settlement of claims; 
and (iv) the scope of Rule 11 of the NCLAT Rules 2016. We will now 
apply the above discussion to the specific issues before this Court 
in the present factual context, namely, the locus of the appellant to 
institute the present proceedings and the approach of the NCLAT 
in the Impugned Judgment. 
i.	
Locus of the appellant before this Court
73.	 The counsel for the respondents sought to argue that the appellant 
does not have the locus to maintain the present proceedings before 
this Court. They contend that in a case for settlement between the 
Corporate Debtor and the second respondent, there is no scope for 
hearing any other creditors, such as the appellant. We do not find 
merit in this submission. 
74.	 Section 62 of the IBC governs statutory appeals to the Supreme 
Court from the orders of the NCLAT. The provision reads as follows: 
“62. Appeal to Supreme Court – (1) Any person aggrieved 
by an order of the National Company Law Appellate 
Tribunal may file an appeal to the Supreme Court on a 
question of law arising out of such order under this Code 
within forty-five days from the date of receipt of such order. 
(2) The Supreme Court may, if it is satisfied that a person 
was prevented by sufficient cause from filing an appeal 
within forty-five days, allow the appeal to be filed within a 
further period not exceeding fifteen days.” 
(emphasis
supplied)
75.	 The provision stipulates that “any person” who is aggrieved by the 
order of the NCLAT may file an appeal before the Supreme Court 
within the prescribed limitation period. Similar language is used in 
Section 61 of the IBC, which provides for appeals to NCLAT from 
orders of the NCLT.50 The use of the phrase “any person aggrieved” 
50	
 “61. Appeals and Appellate Authority.- 
(1) Notwithstanding anything to the contrary contained under the Companies Act 2013 (18 of 2013), any 
person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the 
National Company Law Appellate Tribunal. 
[…]”
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
indicates that there is no rigid locus requirement to institute an 
appeal challenging an order of the NCLT, before the NCLAT or an 
order of the NCLAT, before this Court. Any person who is aggrieved 
by the order may institute an appeal, and nothing in the provision 
restricts the phrase to only the applicant creditor and the corporate 
debtor. As noted above, once the CIRP is initiated, the proceedings 
are no longer restricted to the individual applicant creditor and 
the corporate debtor but rather become collective proceedings (in 
rem), where all creditors, such as the appellant, are necessary 
stakeholders. The appellant is not an unrelated party to the CIRP, 
but is in fact, an entity whose claims had been verified by the 
IRP vide letter 19 August 2024. The appellant who claims to be a 
Financial Creditor, has expressed reasonable apprehensions about 
the prejudice it would face if there were roundtripping of the funds, 
and the prioritization of the debts of the second respondent, an 
operational creditor. 
76.	 In any event, the appellant had moved an application before the 
NCLAT seeking impleadment as a respondent and the objections 
of the appellant were specifically recorded and addressed in the 
Impugned Judgement. Therefore, there is no doubt that the appellant 
falls within the ambit of the phrase “any person aggrieved” and has 
the locus standi to institute the present Civil Appeal
before this Court. 
ii.	
Approach of the NCLAT in the Impugned Judgement
77.	 The appellant contends that the NCLAT erred in invoking its inherent 
powers under Rule 11 of the NCLAT Rules in the presence of a 
prescribed procedure dealing with the withdrawal of CIRP. The 
respondent, on the other hand, contends that at the time of executing 
the settlement agreement, the CoC was not formed and in such 
situations, Rule 11 of the NCLAT Rules may be invoked to allow 
the settlement. In view of the detailed discussion in Part D of this 
judgement, we find considerable force in the submissions of the 
appellant on this point. 
78.	 In paragraph 63 of this judgement, we identified the four stages 
at which a procedure for the withdrawal of CIRP or settlement 
of claims is contemplated in the existing legal framework. The 
situation before the NCLAT in the present case fell within serial 
number (ii), that is, when the application of a creditor has been
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admitted and CIRP has been initiated, however, the CoC has not 
been formed. When settlement was sought by the first respondent 
before the NCLAT, the Section 9 petition had been admitted and 
the Section 7 petition had also been disposed of on that basis. 
However, admittedly, on this date, i.e. 31 July 2024, the CoC had 
not been constituted and the NCLAT subsequently stayed the 
formation of the CoC. 
79.	 In such cases, the legal framework mandates that an (i) application 
for withdrawal be moved; (ii) the application has to be moved through 
the IRP; and (iii) it be placed before the NCLT for approval. None of 
these requirements were met in the present case. First and foremost, 
there was no formal application instituted to seek the withdrawal 
of the CIRP. The settlement agreement was taken on record and 
approved by the NCLAT based on the submissions and assurances 
of the counsel before it and the affidavits/undertakings filed by the 
parties. Further, the first respondent, who is a former director of 
the Corporate Debtor, did not move the application through the IRP 
and instead approached the NCLAT directly. Finally, the request 
to approve the settlement was moved before the NCLAT during 
appellate proceedings, instead of being placed before the NCLT. 
Despite these grave deviations, the NCLAT still proceeded with 
approving the settlement and setting aside the CIRP by invoking its 
inherent power under Rule
11 of the NCLAT Rules. 
80.	 We are of the view that recourse to Rule 11 of the NCLAT Rules was 
not warranted in the present circumstances. As noted above, ‘inherent 
powers’ cannot be used to subvert legal provisions, which exhaustively 
provide for a procedure. To permit the NCLAT to circumvent this 
detailed procedure by invoking its inherent powers under Rule 11 
would run contrary to the carefully crafted procedure for withdrawal. 
In the Impugned Judgement, the NCLAT does not provide any 
reasons for deviating from this procedure or the urgency to approve 
the settlement without following the procedure. The correct course 
of action by the NCLAT would have been to stay the constitution 
of the CoC and direct the parties to follow the course of action in 
Section 12A read with Regulation 30A of the CIRP Regulations 2016. 
This legal framework for such withdrawal was formulated after giving 
due consideration to the appropriate procedure for withdrawal and 
balancing it with the objectives of the IBC.
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81.	 Even if the procedural infirmity is kept aside, once the CIRP was 
admitted, the proceedings became collective, and all creditors of the 
Corporate Debtor became stakeholders. As noted in Swiss Ribbons 
(supra), even while invoking Rule 11 to allow withdrawal, the NCLT 
must hear all the concerned parties and consider all relevant factors 
on the facts of each case. The appellant raised detailed objections 
before the NCLAT to the source of the funds for the settlement and 
a reasonable apprehension that there was round tripping of funds, 
in violation of the order passed by the Delaware Court on 18 March 
2024. These objections were summarily dismissed by the NCLAT, 
relying solely on the undertaking filed by Riju Raveendran. The only 
finding in this regard is found in paragraph 44. The NCLAT relies 
entirely on the undertaking filed by Riju Raveendran and states 
that “although, the Applicant is not satisfied about the undertaking 
but the Applicant has also not brought on record any evidence to 
the contrary that the money which is being offered has actually 
been brought by Riju Raveendran from the money disbursed to the 
borrower in terms of credit agreement or has been taken out of the 
coffers of the CD.” Alleged facts such as the fraudulent transfer of 
USD 533 million to a hedge fund in the United States; the orders of 
the US Court restraining the brothers from transferring or
dissipating 
the amount; the contempt proceedings against Mr Riju Raveendran; 
the ongoing investigation by the Enforcement Directorate against 
the first respondent and the Corporate Debtor; and other attempts 
by the Corporate Debtor to dissipate assets, were not adequately 
addressed by the NCLAT.
iii.	
Decisions of this Court cited in the Impugned Judgement 
82.	 The respondents relied on the decisions of this Court in Ashok G. 
Rajani v. Beacon Trusteeship Ltd.,51 and Abhishek Kumar (supra) 
to argue that before the CoC is formed, the proceedings are between 
the applicant creditor and the debtor and thus, Rule 11 can be invoked 
to allow the settlement. In the Impugned Judgement too, the NCLAT 
relies on the decisions of this Court in Abhishek Kumar (supra) and 
Kamal K Singh (supra), to justify the invocation of Rule 11 of the 
NCLAT Rules and observe that there has been “a change in the law 
on settlement”. The respondents are correct to contend that each of 
51	
2022 SCC OnLine SC 1275
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these decisions was rendered after Section 12A was inserted and 
Regulation 30A was amended. However, it is important to understand 
the context in which this Court upheld the invocation of Rule 11 of the 
NCLAT Rules and whether these decisions considered the prescribed 
procedure under Section 12A and the amended Regulation 30A. We 
are of the considered view that these judgements do not advance 
the case of the respondents. 
83.	 In Kamal Singh (supra), a two-judge bench of this Court passed a 
brief order setting aside an order of the NCLT, which dismissed an 
application filed under Rule 11 of the NCLT Rules 2016 for withdrawal 
of CIRP based on a settlement arrived at before the constitution of 
the CoC. This Court relied on the observations in para 82 of Swiss 
Ribbons (supra) referred to above, wherein this Court stated that 
at the stage when the CoC has not been constituted, the NCLT may 
exercise its inherent powers under Rule 11 to allow or disallow an 
application for withdrawal or settlement. It may be noted that there 
is no reference in this order to the prescribed procedure under 
Section 12A read with Regulation 30A, although the proceedings 
took place well after their insertion. As noted above, in response to 
the decision of this Court in Swiss Ribbons (supra), there was a 
change in the legal framework and Regulation 30A was amended to 
specifically provide for a procedure for withdrawal before the
CoC is 
constituted. The intention was to account for the lacuna identified in 
Swiss Ribbons (supra) and at the same time, reduce the reliance 
on ‘inherent powers’ by prescribing a procedure for withdrawal at 
this stage. In our view, as the order overlooks the relevant legal 
provisions and fails to even refer to the existing legal framework 
under Regulation 30A, it would be per incuriam and is not binding 
on this Court.
84.	 The same infirmity is found in Ashok G. Rajani (supra), a judgement 
rendered by a two-judge bench of this Court. In this case, too, the 
petition filed by a creditor against a corporate debtor had been 
admitted, but the CoC had not been constituted. The decision 
refers to Section 12A of the IBC but fails to even acknowledge the 
amendment to Regulation 30A, which specifically provided for such an 
eventuality. Instead, this Court proceeded to hold while Section 12A 
of the IBC permits withdrawal after admission of the application by 
the creditor, it only provides for the procedure for withdrawal after the 
CoC has been constituted, without laying down a bar on withdrawal
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GLAS Trust Company LLC v. BYJU Raveendran & Ors.
before the constitution of the CoC. According to the two-judge bench, 
the question of approval of the CoC by the requisite percentage of 
votes can only arise after the CoC is constituted and thus, Rule 11 
must be invoked to allow withdrawal. This observation was made 
without as much as a passing reference to Regulation 30A, which 
specifically governs such a situation. 
85.	 The decision of this Court in Abhishek Kumar (supra) rendered by a 
two-judge bench of this Court speaking through Justice Vikram Nath, 
correctly identifies the legal framework. However, it is distinguishable 
from the present factual situation and the findings of this Court do 
not support the case of the respondents. The facts are comparable 
vis-à-vis the stage of the proceedings – the petition had been 
admitted, but the CoC had not been constituted. However, in that 
case, the IRP had moved an application under Regulation 30A of 
the CIRP Regulations. Instead of adjudicating upon the application 
under Regulation 30A, the NCLT took the view that Regulation 30A 
is a mere directory provision and dismissed the application. The 
NCLT vacated the stay on the constitution of the CoC and directed 
that the application under 12A be decided directly (i.e. including for 
compliance with the requirement of a ninety-percent voting share 
of the CoC). This Court set aside the order of the NCLT on the 
ground that Regulation 30A
provides a complete mechanism for 
dealing with  the applications filed under such a provision, and it is 
not necessary to get the approval of a ninety percent voting share 
of the CoC if the application for withdrawal is moved before the 
constitution of the CoC. On the other hand, in the present case, 
there was no application filed through the IRP before the NCLT under 
Regulation 30A at all. Therefore, this decision is not applicable to 
the present case. 
F.	
Conclusion
86.	 For the above reasons, we allow the present appeal and set aside 
the impugned judgment of the NCLAT dated 2 August 2024 in the 
above terms. At this stage, it would not be appropriate for this Court 
to adjudicate on the objections of the appellant to the settlement 
agreement on merits. The issues raised are the subject matter of 
several litigations in different fora, including the Delaware Court 
and investigation by various authorities, including the Enforcement 
Directorate, which are pending.
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87.	 During the course of the proceedings before this Court, the CoC has 
been constituted. The parties are at liberty to invoke their remedies, 
to seek a withdrawal or settlement of claims, in compliance with 
the legal framework governing the withdrawal of CIRP. Nothing in 
this judgment should be construed as a finding on the conduct of 
any of the parties or other stakeholders involved in the insolvency 
proceedings. 
88.	 The amount of Rs 158 crore, along with accrued interest, if any, 
which has been maintained in a separate escrow account pursuant 
to the Order of this Court dated 14 August 2024, is to be deposited 
with the CoC. The CoC is directed to maintain this amount in an 
escrow account until further developments and to abide by the further 
directions of the NCLT.
89.	 The civil appeal and special leave petition shall stand disposed of 
accordingly. 
90.	 Pending applications, if any, stand disposed of.
Result of the case: Civil appeal and special leave petition 
disposed of.
†Headnotes prepared by: Divya Pandey