The National Company Law Tribunal (NCLT), Delhi Bench (Court-II) has allowed the withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated against Jalan Transolutions (India) Limited, marking a significant development in the company’s ongoing insolvency matter. The order, dated 21st August 2025, was issued in connection with application IA-1717/ND/2025 filed under Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016.

Case Background

The insolvency proceedings against Jalan Transolutions (India) Limited were initiated under Section 7 of the IBC, 2016, based on a petition filed by Capital Trade Links Limited (Financial Creditor). The petition was admitted earlier in June 2025, which led to the commencement of the CIRP. Following this, a Resolution Professional (RP) was appointed to manage the affairs of the corporate debtor in accordance with insolvency laws.

However, subsequently, an application under Section 12A of the IBC was moved, seeking withdrawal of the CIRP. Section 12A provides for the withdrawal of insolvency proceedings if approved by 90% voting share of the Committee of Creditors (CoC). After due consideration, the tribunal allowed the application, leading to the termination of the insolvency proceedings.

NCLT’s Observations and Order

The order delivered by Hon’ble Member (Judicial) Mr. Ashok Kumar Bhardwaj and Hon’ble Member (Technical) Ms. Reena Sinha Puri took note of Para 25 of the order dated 6th August 2025 passed by the 3rd Member, which cleared the ground for withdrawal of the case. The tribunal allowed the application and directed as follows:

1. CIRP Withdrawal Approved – With the withdrawal of IB-480/ND/2024, the insolvency proceedings initiated on 12th June 2025 stand terminated. Jalan Transolutions is now out of the insolvency process.

2. Union Bank of India’s Rights Protected – The Resolution Professional (RP) has been directed to send a copy of the order to Union Bank of India, one of the stakeholders in the case. The tribunal clarified that the bank retains the right to initiate insolvency proceedings or pursue other recovery mechanisms in accordance with applicable laws.

3. Process Closure – With this withdrawal, Jalan Transolutions (India) Limited is no longer under the rigour of CIRP and can continue its operations without the restrictions imposed under insolvency proceedings.

Implications for Jalan Transolutions

The withdrawal of CIRP comes as a relief for Jalan Transolutions (India) Limited, which can now resume normal business operations without the oversight of the insolvency resolution process. This development highlights the role of Section 12A of IBC in providing companies and creditors with a framework for amicable settlement and withdrawal of insolvency proceedings when mutually agreed upon.

For creditors like Union Bank of India, while the current CIRP has been withdrawn, the order keeps the door open for fresh action in case of non-repayment or future defaults. This ensures that while the company is relieved of ongoing insolvency, creditors’ rights remain safeguarded.

Regulatory Disclosure

The company, through its Company Secretary and Compliance Officer, Ms. Shruti Goel, informed the National Stock Exchange of India (NSE) of the development under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure ensures that all stakeholders, including shareholders and creditors, are informed of the tribunal’s order and its implications for the company’s future.

Broader Significance

This case illustrates the importance of IBC’s flexible framework, particularly Section 12A, which allows for the withdrawal of insolvency proceedings in cases where creditors and the company reach an understanding. It also underlines the judiciary’s balanced approach, ensuring that while companies are given relief from insolvency, creditors’ rights to pursue recovery remain intact.

The termination of CIRP against Jalan Transolutions also provides a positive signal to investors and stakeholders, as it allows the company to focus on restructuring and growth without the constraints of insolvency proceedings.

Conclusion

The NCLT Delhi’s decision to allow withdrawal of Jalan Transolutions’ CIRP under Section 12A of IBC, 2016 is a crucial development that restores operational control to the company while keeping creditors’ rights intact. As the company steps out of the insolvency framework, it can now work towards financial stability, operational efficiency, and renewed investor confidence.

This disclosure also reinforces the importance of timely regulatory communication under SEBI Listing Regulations, ensuring transparency, governance, and informed decision-making for all stakeholders.

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