Pre-admission insolvency petition withdrawal is permitted when parties settle and jointly seek disposal before admission.

A section 9 insolvency petition may be withdrawn before admission when the parties jointly place a settlement on record and seek withdrawal. Where the dispute has been amicably resolved and no adjudication on admission has yet been made, there is no procedural impediment to permitting the operational creditor to withdraw the application. The insolvency proceedings are then disposed of as withdrawn.

---

---

Issues: Whether a company petition under section 9 of the Insolvency and Bankruptcy Code, 2016 could be permitted to be withdrawn on the basis of a settlement before admission.

Analysis: The petition had not yet been admitted. The parties placed a joint memo on record stating that the dispute had been amicably settled and that the corporate debtor had undertaken to satisfy the agreed payment terms. In these circumstances, there was no impediment to allowing the operational creditor to withdraw the petition, since the proceedings had not crossed the stage of admission and the parties had resolved their commercial dispute.

Conclusion: Withdrawal of the petition was permitted and the insolvency application was disposed of as withdrawn.

Ratio Decidendi: A pre-admission insolvency petition may be withdrawn on settlement where the parties jointly seek such withdrawal and no adjudication on admission has yet been made.

---