Pre-CoC settlement permits withdrawal of CIRP when Form FA and settlement payment proof satisfy the insolvency rules.

An admitted corporate insolvency petition may be withdrawn where the parties settle before constitution of the Committee of Creditors and the settlement is placed before the Adjudicating Authority through the Interim Resolution Professional with Form FA and proof of full and final payment. On those facts, the requirements under Section 12A of the Insolvency and Bankruptcy Code, 2016 and Regulation 30A(1)(a) of the CIRP Regulations were treated as satisfied, allowing withdrawal of the insolvency process. The corporate insolvency resolution process and the moratorium were withdrawn.

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Issues: Whether the application for withdrawal of the admitted insolvency petition could be allowed on the basis of a settlement reached between the parties before constitution of the Committee of Creditors.

Analysis: The settlement between the parties was placed before the Adjudicating Authority through the Interim Resolution Professional, together with the prescribed Form FA and proof of payment towards the agreed full and final settlement. The Committee of Creditors had not been constituted. In that situation, the procedural requirements under Section 12A of the Insolvency and Bankruptcy Code, 2016 and Regulation 30A(1)(a) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 were treated as satisfied, enabling withdrawal of the corporate insolvency process.

Conclusion: The withdrawal application was allowed and the corporate insolvency resolution process, together with the moratorium, stood withdrawn.

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