Pre-committee insolvency withdrawal under Section 12A permitted after settlement and Form FA filing.

Withdrawal of an insolvency petition under Section 12A of the Insolvency and Bankruptcy Code was permitted on the basis of settlement between the operational creditor and the suspended management after receipt of the claim amount and execution of Form FA. Although the corporate insolvency process had been admitted and a resolution professional appointed, the committee of creditors had not yet been constituted. In that pre-committee stage, the Tribunal found no impediment to withdrawal and allowed the petition to be disposed of as withdrawn.

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Issues: Whether withdrawal of the insolvency petition under Section 12A of the Insolvency and Bankruptcy Code, 2016 could be permitted on the basis of settlement between the parties before constitution of the committee of creditors.

Analysis: The application was supported by the operational creditor and the suspended management after receipt of the claim amount and execution of Form FA. The record showed that the corporate insolvency process had been admitted, a resolution professional had been appointed, and the committee of creditors had not yet been constituted. In such circumstances, the Tribunal found no impediment to permitting withdrawal, particularly in light of the settlement and the principle recognised for pre-committee withdrawal under the Tribunal's powers.

Conclusion: Withdrawal of the insolvency petition was allowed and the proceeding stood disposed of as withdrawn.

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