NCLAT says CIRP Can Be Closed Where Section 12A Becomes Procedurally Unworkable

The CIRP of Shalfeyo Industries had continued for nearly four years against an operational claim of about ₹11.90 lakh, while the sole financial creditor had already been paid in full and the operational creditor agreed to settle for ₹18 lakh. NCLAT found that Section 12A could not be completed because CIRP costs remained pending and the required bank guarantee could not be determined. Rather than allowing the CIRP to continue indefinitely, it directed closure subject to payment of the settlement amount and subsequently determined CIRP costs.