Case Overview
This matter concerns an application (IA(IBC)/881(CHE)/2026) filed by the Resolution Professional (RP), CA S. Prabhu, under Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016, seeking permission to withdraw the main insolvency petition CP(IB)/184(CHE)/2025. The petition was originally filed by Axis Bank Ltd against corporate debtor Sri Vinayakha Spinning Mills Pvt Ltd (CIN: U17111TZ2005PTC01193). The Tribunal had admitted the petition and initiated Corporate Insolvency Resolution Process (CIRP) on 2nd April 2026, appointing the applicant as the Interim Resolution Professional (IRP).
The IRP made a public announcement in 'Dinamani' and 'New Indian Express' on 10th April 2026, with the last date for claims set as 22nd April 2026. Following verification of claims, a Committee of Creditors (CoC) was constituted with Axis Bank Ltd as the sole financial creditor. In the first CoC meeting on 7th May 2026, the IRP was confirmed as the RP. A claim of approximately ₹11.04 crore from Naren Vanathi Industries Pvt Ltd was noted but kept pending due to objections from the corporate debtor's management, who alleged it was fraudulent. In the second CoC meeting on 14th May 2026, the RP provided an update that this claim was rejected in full due to the claimant's failure to provide adequate supporting documents.
In the same meeting, Axis Bank Ltd submitted Form-FA dated 12th May 2026 for withdrawal of the CIRP. The CoC, with 100% voting share, passed a resolution approving the withdrawal based on a settlement proposal from the promoter of the corporate debtor. The application states that Axis Bank had also remitted ₹6.0 lakh on 12th May 2026 towards CIRP costs, thus fulfilling the requirement for costs under Regulation 30A of the IBBI (CIRP) Regulations, 2016 and negating the need for a bank guarantee. An Expression of Interest (Form G) had not been issued.
Final Outcome
The Tribunal allowed the application IA(IBC)/881/CHE/2026, finding it compliant with the provisions of Section 12A of the IBC and Regulation 30A of the CIRP Regulations. Consequently, the main company petition CP(IB)/184(CHE)/2025 was dismissed as withdrawn. The CIRP against Sri Vinayakha Spinning Mills Pvt Ltd stands withdrawn. The management of the corporate debtor is to be handed back to its Board of Directors, whose powers were suspended upon the initiation of CIRP. The RP is discharged from all responsibilities. Operational creditors retain the liberty to pursue their claims as per law.
Topics: Corporate Insolvency, NCLT Proceedings, Debt Settlement