NCLT Delhi Allows Insolvency Withdrawal Against HIL India After Creditor Settlements

The Delhi Bench of the National Company Law Tribunal (NCLT) on 30 September allowed withdrawal of the corporate insolvency resolution process (CIRP) against HIL (India) Limited under Section 12A of the Insolvency and Bankruptcy Code, 2016 (IBC), following settlements with its creditors.

A Bench comprising President Anupinder Singh Grewal and Technical Member Ravindra Chaturvedi allowed the application filed by Interim Resolution Professional (IRP) Rohit Sehgal for withdrawal of the CIRP. It held:

“...the instant Application under Section 12A is liable to be allowed, as the interveners' claims have been settled. However, it is made clear that the settlement has been recorded only with creditors who have intervened in the matter either before this Adjudicating Authority or before NCLAT, and therefore the same and/ or this order allowing the instant Application shall not be construed to bar the rights of other creditors who either have already filed their claims before IRP but not intervened or may file their claims, from availing their legal remedies in accordance with law, as the case may arise.”

HIL (India) Limited was admitted to CIRP on 30 July 2025 on an application filed by IDBI Bank Limited under Section 7 of the IBC. Sehgal was appointed as IRP and a public announcement inviting claims was issued on 1 August 2025.

Suspended director D.N.V. Srinivasa Raju challenged the admission order before the National Company Law Appellate Tribunal (NCLAT) in Company Appeal CA(AT)(Ins) No. 1189 of 2025.

On 11 August 2025, the NCLAT directed the IRP not to take further steps pursuant to the admission order. During the pendency of the appeal, the suspended management reached a One-Time Settlement (OTS) with IDBI Bank.

On 25 February 2026, the NCLAT upheld the NCLT's admission order and permitted withdrawal under Section 12A. It directed the parties to approach the NCLT, the Adjudicating Authority, through the IRP for withdrawal of the CIRP.

Following the NCLAT's directions, IDBI Bank submitted Form FA to the IRP and the withdrawal application, I.A. No. 1432 of 2026, was filed before the NCLT on 2 April 2026.

IDBI Bank accepted an OTS of Rs. 1.78 crore, payable in instalments. Settlements were also reached with operational creditors who had intervened in the proceedings, namely Associated Road Carriers Ltd., ATO (I) Ltd. and Sekai Pvt. Ltd. The agreements provided for full and final settlement of their disputes upon receipt of the agreed payments.

Wanksons Chemical Industries Pvt. Ltd., Respondent No. 3, initially opposed the withdrawal. It claimed dues exceeding Rs. 21.11 crore, including principal and interest, for the supply of Chloral used in DDT production. It was also submitted that another claim was pending before the State Level Micro and Small Enterprises Facilitation Council (MSEFC).

During the proceedings, however, Wanksons filed an affidavit dated 11 September 2026 confirming a settlement for Rs. 12.01 crore, excluding GST. It confirmed receipt of the full and final payment and withdrew its objections.

The Tribunal noted that all intervening creditors had settled their claims. It also noted that the withdrawal application had been filed before the 2026 amendments to Section 12A and that Regulation 30A permitted withdrawal through the IRP before the constitution of the Committee of Creditors (CoC). It allowed the application for withdrawal of the CIRP.

However, it clarified that the order would not prejudice the rights of creditors who had filed claims before the IRP but had not intervened in the proceedings, or creditors who may file claims subsequently.

Further, the Bench directed the IRP to hand over all records to the suspended Board of Directors and discharged him from his duties. It directed IDBI Bank to pay the IRP's fees and expenses incurred during the CIRP.

Accordingly, the NCLT allowed the withdrawal.