Withdrawal of CIRP Proceeding pursuant to Settlement under Insolvency and Bankruptcy Code, 2016 – By Advocate Shivam Jaiswal
Introduction
This is well proven that the ultimate aim of civil lawsuits is to resolve disputes, which are typically accomplished by the constructive intervention of the judiciary, and sometimes by parties reaching out to court settlement as allowed by statute.
Previously, in accordance with the Insolvency and Bankruptcy Code, 2016 (“IBC”), no provision was made for the withdrawal of an application filed before the NCLT except as provided for in Rule 8 of the Insolvency and Bankruptcy (Application to the NCLT) Rules of 2016, where the NCLT could permit the withdrawal of the application on a request made by the applicant prior to its admission. The report of the Insolvency Law Committee too recommended amendment of Rule 8 to allow withdrawal after the admission of CIRP. Subsequently, Section 12A was inserted via Amendment Ordinance of 6th June 2018 which gave the Adjudicating Authority power to allow withdrawal on application by CIRP applicant with 90% voting share approval of CoC in such manner as “prescribed”.