National Company Law Tribunal, New Delhi, Court-V (Special Bench): The present interlocutory application, New IA/3976/2026, was filed by Aviator ML 29641 Ltd. (operational creditor) under Rule 11 read with Rule 11(2) of the National Company Law Tribunal Rules, 2016 (‘NCLT Rules, 2016’), seeking liberty to withdraw C.P. IB-674/ND/2024 (company petition) filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against SpiceJet Limited (corporate debtor). The Bench of Mahendra Khandelwal (Judicial Member) and Anu Jagmohan Singh (Technical Member), permitted withdrawal of the company petition under Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (2016 Rules). However, it declined to take the parties settlement agreement on record, as the request for withdrawal had been made at a belated stage of the proceeding. It directed payment of costs of Rs. 15,00,000/-, shared equally between the parties, as a condition for the withdrawal to take effect.
The Court observed that,
“…Therefore, at this stage, we are not inclined to consider and take into account or take on record the settlement agreement entered between the parties especially in view of the fact that the petition for initiation of CIRP against the same Corporate Debtor in other 7 matters are pending. Further, 4 other matters are pending for hearing…”
Background:
In the company petition filed by the operational creditor under Section 9 IBC, extensive arguments had been heard. The parties were directed to file written submissions, following which the matter was listed for pronouncement of orders. When the matter was listed for pronouncement, both Senior Counsels of the operational creditor and the operational creditor informed the Tribunal that the matter had been settled between the parties. They stated that an application for withdrawal would be moved during the course of the day.
In the present application, the operational creditor sought an order allowing withdrawal of the Company petition in terms of the settlement agreement. It also sought liberty to revive the same in the event of default as set out in Clauses 7 and 8 of the settlement agreement, along with any other orders deemed just and proper.
Issues
1. Whether the adjudicating authority was required to take the parties settlement agreement on record while permitting withdrawal of the company petition, particularly where multiple other CIRP proceedings against the same corporate debtor were pending.
2. Whether liberty to withdraw an unadmitted company petition could be granted notwithstanding the pendency of other insolvency proceedings against the same corporate debtor.
3. Whether costs could be imposed as a condition for permitting withdrawal sought at a belated stage of the proceedings.
[Also Read : SpiceJet Archives | SCC Times]
Analysis, Law, and Decision:
The Tribunal noted that the order in company petition had been reserved together with 7 other matters concerning the same Corporate Debtor. It also noted that 4 further matters against the corporate debtor were pending hearing.
The Tribunal held that it was not inclined to consider, take into account, or take on record the contents of the settlement agreement, as 7 other matters are pending against same corporate debtor.
Further, the Tribunal held that since the company petition had not been admitted, the proceeding was to be treated as one in personam and not in rem. Where the operational creditor who had filed the company petition did not wish to pursue it, liberty could be granted to withdraw the same in exercise of the powers conferred under Rule 8 of the 2016 Rules.
The Tribunal further noted that the request for withdrawal had been made at a belated stage of the proceeding, after extensive arguments had been heard and the order had been reserved for pronouncement. The matter was listed for pronouncement of orders on 17 August 2026. When the matter was taken up for pronouncement on that date, both Senior Counsels of the operational creditor and the Corporate Debtor informed the Tribunal that the matter had been settled between the parties, and stated that an application for withdrawal would be moved during the course of the day.
Accordingly, the Tribunal held that withdrawal would be subject to payment of costs of Rs. 15,00,000/-, payable equally by the operational creditor and the Corporate Debtor (Rs. 7,50,000/- each), to be deposited in the Prime Minister’s National Relief Fund within 7 days.
The Tribunal further directed that the order, insofar as it related to withdrawal, would take effect only upon production of proof of payment of costs to the Registry. Failing this, the registry was directed to place the matter before the bench for further orders.
Accordingly, the Tribunal disposed of the present application in the aforesaid terms, and the company petition was dismissed as withdrawn.
[Aviator ML 29641, Ltd. v. SpiceJet Ltd., 2026 SCC OnLine NCLT 4551, decided on 19-8-2026]
Advocates who appeared in this case:
For Applicant: Ramji Srinivasan, Senior Advocate, with Anandh Venkataramani, Saket Salapathy, Anubhav Dutta, Ishita Thakur, Nikita Sharma, Kavya Kumar and Shefali, Advocates
For Respondent: Krishnendu Datta, Senior Advocate, with Sanjay Gupta, Aditi Pundhir, Manisha Sharma, Rishabh Wahi, Raghu Aggarwal and Niharika Sharma, Advocates
