NCLAT allows withdrawal of insolvency proceedings against Kanoria Sugar

The NCLAT has permitted withdrawal of corporate insolvency resolution process (CIRP) against Kanoria Sugar and General Manufacturing Company.

A two-member bench of the National Company Law Appellate Tribunal (NCLAT) permitted Punjab National Bank (PNB), the financial creditor of Kanoria Sugar, to withdraw its insolvency plea after a settlement with the company.

"We permit the Creditor to withdraw the Section 7 Application filed under Section 7. In result, the CIRP initiated vide Order dated April 27, 2022 stands terminated," said the two-member bench comprising Chairperson Justice Ashok Bhushan and Member Naresh Salecha.

Earlier on April 27, the Allahabad bench of the National Company Law Tribunal (NCLT) admitted the plea filed by the public sector lender PNB to initiate insolvency proceedings against Kanoria Sugar and General Manufacturing Company.

PNB had got the CIRP initiated for dues of Rs 49.65 crore.

The NCLT order was challenged before the NCLAT.

The appellate tribunal had on May 23 passed an order staying the constitution of the Committee of Creditors (CoC).

Later, an interim application was jointly filed by both the parties along with a copy of the One Time Settlement (OTS) proposal dated May 31.

The bank has accepted OTS for Rs 40 crore against the outstanding amount of Rs 49.65 crore.

"Both the parties have settled the matter between them," the NCLAT observed.