Brilliant Alloys Private Limited Petitioner(S) v. Mr. S. Rajagopal And Others (S).

Factual and Procedural Background

The case concerns a request to withdraw insolvency proceedings that had been mutually agreed upon by the Corporate Debtor, the Financial Creditor (State Bank of India), and an Operational Creditor (Respondent No. 3). The adjudicating authority refused the withdrawal solely because Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, bars withdrawal after an invitation for expression of interest has been issued. A Special Leave Petition (SLP) was filed before the Supreme Court challenging that refusal.

Legal Issues Presented

1. Whether Regulation 30A, which prohibits withdrawal after an invitation for expression of interest, is mandatory or merely directory when read with Section 12A of the Insolvency and Bankruptcy Code, 2016.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court noted that Section 12A of the Insolvency and Bankruptcy Code contains no restriction on withdrawal after an invitation for expression of interest. Consequently, it held that the limitation appearing in Regulation 30A must be read in harmony with the parent statute. Because the statutory provision lacks such a restriction, the regulatory bar can only be considered directory, to be applied or relaxed according to the facts of each case. Applying this interpretation, the Court allowed the settlement reached between all creditors and the corporate debtor and annulled the insolvency proceedings.

Holding and Implications

The settlement is approved and the insolvency proceedings are annulled; the Special Leave Petition is disposed of.

Directly, the parties are restored to the terms of their settlement, and the insolvency process is terminated. The decision signals that the Supreme Court views Regulation 30A's post-EOI withdrawal bar as directory rather than mandatory, allowing flexibility in appropriate cases, though it stops short of establishing a broader precedent beyond these facts.