Union Bank of India Vs Air Travel Enterprises India Limited (Kerala High Court)
Summary: The Kerala High Court allowed the writ petition filed by Union Bank of India challenging certain observations and the imposition of Rs. 1 lakh exemplary costs by the National Company Law Tribunal, Kochi Bench, in proceedings concerning withdrawal of an insolvency application.
The petitioner, a nationalized bank, had extended credit facilities to the company and, following default in payment of arrears, instituted proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the corporate guarantor. Subsequently, the liabilities payable to the petitioner were settled under an OTS. Following the settlement, the petitioner sought withdrawal of the proceedings before the NCLT, Kochi Bench by filing Ext.P3, which was numbered as I.A. (IBC)/313/KOB/2026.
The NCLT found several errors in the withdrawal application. The cause title contained mistakes and a person who was not a party to the application was shown as a respondent and consequently appeared before the Tribunal. The NCLT also noted that the application should have been presented under Section 12A of the IBC rather than under the general provisions of Rule 11 of the National Company Law Tribunal Rules, 2016. Further, the proposed withdrawal had not been placed before the Committee of Creditors as required under the IBC. On these grounds, the NCLT rejected the application by order dated 21.07.2026.
