Dismissing operational creditor’s plea to withdraw CIRP despite pre-amendment settlement, the Chennai Bench of the National Company Law Tribunal (NCLT) ruled that the date of submission of complete Form FA, and not the date of settlement, determines the applicable law, and 90% CoC approval is mandatory under the amended regime. The NCLT ruled that the right to withdraw a CIRP application under Section 12A is governed by the provisions in force on the date when the complete Form FA is submitted to the IRP.
The Tribunal clarified that under the amended Section 12A read with amended Regulation 30A, withdrawal requires 90% voting share approval of the CoC, and no such approval having been obtained, the withdrawal application is non-compliant and liable to be dismissed. The protection under Section 6 of the General Clauses Act is unavailable where no vested right has accrued under the repealed provision prior to the amendment coming into force.
The Division Bench comprising Sanjiv Jain (Judicial Member) and Venkataraman Subramaniam (Technical Member) observed that the effective date of submission of the complete Form FA was June 01, 2026, not May 28, 2026, as the Form FA handed over on May 28, 2026 was undated and the properly dated Form FA was submitted only on June 01, 2026. The email correspondences between the IRP and the operational creditor established beyond doubt that the complete Form FA was submitted only on June 01, 2026.
The Tribunal noted that both the IBC Amendment Act, 2026 (notified on May 26, 2026) and the IBBI Third Amendment Regulations, 2026 (notified on June 01, 2026) were in force on June 01, 2026, the date when the complete Form FA was submitted. The Tribunal rejected the contention of the operational creditor and suspended director that the amendment was prospective and would apply only to new cases admitted after notification, observing that the meaning of prospective is that it applies from the date it was notified.
The Tribunal held that Section 6 of the General Clauses Act, 1897 would not be applicable because no right had accrued to the operational creditor under the pre-amended Section 12A, as the complete Form FA was submitted only on June 01, 2026 when the amended provisions were already in force. The right to file a Section 12A application accrues only upon submission of the complete Form FA and payment of CIRP costs and fees, both of which were completed only on June 01, 2026.
The Tribunal further observed that the appearance of the financial creditor, New Link Overseas Finance Limited, which had filed a claim of approximately Rs. 28.36 crore (of which only Rs. 50 lakhs were admitted by the IRP), was a relevant consideration under the amended Section 12A, which required 90% voting share approval of the CoC for withdrawal. Regarding the defreezing of the bank account, the Tribunal observed that while the order dated June 05, 2026 directed the IRP not to convene the CoC, the CIRP process itself was not stayed, and the IRP was justified in taking steps to take over the assets of the corporate debtor under Sections 17 and 18 of the IBC.
Briefly, the case revolves around Sargam Metals Pvt Ltd., which was admitted into Corporate Insolvency Resolution Process (CIRP) on Nov 28, 2024 by the National Company Law Tribunal (NCLT), Chennai, following a Section 9 petition filed by Neeraj Agarwal, Proprietor of Ambal Agencies, the operational creditor. K.J. Vinod was appointed as the Interim Resolution Professional (IRP). The suspended director, S. Arun, challenged the admission order before the National Company Law Appellate Tribunal (NCLAT), which granted an interim stay on Dec 11, 2024 that continued until the appeal was dismissed on April 21, 2026.
After the dismissal of the appeal, the corporate debtor and the operational creditor entered into a Settlement Agreement on May 15, 2026, settling the entire admitted liability. The Insolvency and Bankruptcy Code (Amendment) Act, 2026 came into force on May 26, 2026, bringing in significant changes to Section 12A. On May 28, 2026, the operational creditor handed over an undated Form FA along with the settlement agreement to the IRP. The CIRP costs and IRP fees were paid on May 29, 2026. The IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2026, including the amended Regulation 30A, came into force on June 01, 2026. On the same day, the IRP constituted the Committee of Creditors (CoC) and received the properly dated Form FA from the operational creditor.
The operational creditor sought withdrawal of CIRP under Section 12A, whereas, the suspended director sought defreezing of the corporate debtor’s bank account. The IRP filed application to take on record the list of creditors and constitution of CoC, seeking exclusion of 496 days from the CIRP period, and application for taking on record the second status report.
