Andhra Bank Vs. Sterling Biotech Ltd. [Company Appeal (AT) (Insolvency) No. 612 of 2019] - Synopsis
Team SoOLEGAL 8 Jan 2021

In this case, Andhra Bank Vs. Sterling Biotech Ltd. [Company Appeal (AT) (Insolvency) No. 612 of 2019], the Adjudicating Authority had dismissed an application under Section 12A of Insolvency and Bankruptcy Code, 2016, which was submitted at the Promoter's instance and accepted with more than 90% of the CoC's share of the vote, on the basis that the Promoter was not entitled to file a resolution proposal under Section29A of Insolvency and Bankruptcy Code, 2016. The question before the NCLAT was if section 29A of the Code, which makes an individual ineligible to file a resolution proposal, refers to the petitioner if it wishes to withdraw the petition under section 7 or 9 if the CoC accepts it with a 90 percent voting share under section12A of IBC. By referring a judgement on Swiss Ribbons Private Limited and Another and the Code, the Bench was of the view that, the promoters were entitled to settle matters under Section 12A of Insolvency and Bankruptcy Code, 2016.
The NCLAT held that Section 29A of the Code did not apply in the present case, because the withdrawal proposal was submitted at the instance of Andhra Bank and was not a resolution scheme, and that since it was accepted by more than 90% of CoC, hence, NCLT cannot refuse the same.  The Bench had directed the Enforcement Directorate, Central Board of Investigation and SEBI to take a strict against the respondent company. 

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