Authority: National Company Law Tribunal, New Delhi Bench, Court-III (Special Bench)

Order Date: June 9, 2026

Case Overview

The National Company Law Tribunal (NCLT) heard an application filed by Assets Care & Reconstruction Enterprise Limited (Financial Creditor/Applicant) under Section 12A of the Insolvency and Bankruptcy Code, 2016, seeking withdrawal of the Corporate Insolvency Resolution Process (CIRP) against Just About Movies Private Limited (Corporate Debtor/Respondent). The matter was listed for clarification following a directive from the National Company Law Appellate Tribunal (NCLAT) dated January 7, 2026, which required the NCLT to decide the application in accordance with the law laid down by the Supreme Court in GLAS Trust Company LLC v. Byju Raveendran.

The Tribunal extensively referenced legal precedents, noting that in GLAS Trust Company LLC v. Byju Raveendran, the Supreme Court held (Paragraph 63.2) that even in cases falling under Regulation 30A(1)(a), the NCLT must hear the parties concerned and consider all relevant factors before approving or rejecting a withdrawal application under Section 12A. The Tribunal further cited the NCLAT's decision in Suyog Suryakant Talekar v. Trivenimudrai Project Ltd. and Anr., which elaborated that the Adjudicating Authority must undertake a broader examination beyond the settlement between the applicant and petitioning creditor. This examination must include the financial position and solvency of the Corporate Debtor, the status of other creditors, and the overall impact of the proposed withdrawal on the insolvency framework, recognizing that CIRP proceedings are in rem and affect all creditors collectively once admitted.

The Tribunal concluded that the material presently on record was insufficient for an informed adjudication of the Section 12A application and directed the Applicant to provide comprehensive disclosures.

Final Outcome

The NCLT directed the Applicant to submit the following documents and disclosures by way of an affidavit within one week from the date of the order (by June 16, 2026):

  • A duly executed settlement agreement
  • Details of the source and flow of funds proposed/used for settlement, supported by documentary evidence
  • Comprehensive financial disclosure of the Corporate Debtor, including financial statements for FY 2021-2022, 2022-2023, 2023-2024, and 2024-2025; notes to account; Auditor's Report and observations; and any material particulars demonstrating solvency, creditworthiness, and asset-liability position
  • A complete list of all creditors as of the date of CIRP commencement, indicating amounts owed
  • Disclosure of any adverse financial classifications (NPA, wilful defaulter, fraud) by any financial creditor and whether more than one year has passed since such classification
  • Details of all pending litigations, recoveries, or decrees for money realization against the Corporate Debtor
  • A statement on the impact of the proposed settlement on all stakeholders, particularly other creditors, considering the in rem nature of CIRP

The matter was listed for further hearing on June 11, 2026, pending compliance with the disclosure order.

Topics: Insolvency Proceedings, Corporate Withdrawal, Creditor Rights