NCLT Mumbai's third member rules avoidance applications under IBC Sections 43 and 66 can be withdrawn via settlement, resolving a judicial-technical member deadlock.
Rupa Infotech, as sole financial creditor and SRA, settles with Shankheshwar Properties' directors for ₹3.89 crore to withdraw preferential and fraudulent trading claims.
The ruling establishes that NCLT can use inherent powers under Rule 11 and CPC Order XXIII principles to permit withdrawal of avoidance applications.
Settlement resolves allegations of ₹9.5 crore preferential transactions and ₹45 crore fraudulent trading without admission of liability by respondents.