In its ruling dated July 7, 2021 ("Judgement") in the case of Anuj Tejpal v. Rakesh Yadav and Others [I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021], the National Company Law Appellate Tribunal, New Delhi ("NCLAT") permitted the withdrawal of corporate insolvency resolution process ("CIRP") proceedings brought against the Corporate Debtor (defined below) before the creation of The NCLAT further ruled that, in the interest of justice, both the National Company Law Tribunal ("NCLT") and the NCLAT could exercise their inherent authority to approve or reject a withdrawal application, depending on the circumstances of each individual case and the interests of the parties involved.
In the instant case titled Anuj Tejpal v. Rakesh Yadav and Another the issue raised for clarification before the Apex Court was:
Can NCLAT use its inherent authority under Rule 11 of the NCLAT Rules to permit the withdrawal of CIRP proceedings before the CoC of the Corporate Debtor is established?
With regard to this issue, The NCLAT went on to rule that, in the interest of justice and with the interests of the parties involved in mind, it would exercise its inherent powers and permit the withdrawal of the CIRP application against the Corporate Debtor. The NCLAT noted that the current case did not fall under Regulation 30-A(1)(a). The NCLAT upheld the appeal, overturned the contested order, and thus overturned the appointment of the IRP, the corporate debtor moratorium, etc. The NCLAT additionally ordered that the Corporate Debtor be released from all legal restrictions and given immediate permission to operate independently through its board of directors.
The Court categorically stated that,
Rule 11 of NCLAT Rules, 2016 provides that 'Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal.'