Withdrawal Application Filed After Constitution Of CoC Must Obtain Its Approval U/S 12A Of IBC: NCLAT, Chennai

The NCLAT (National Company Law Appellate Tribunal), Chennai, has held that a withdrawal application filed after the constitution of the Committee of Creditors (CoC) must obtain the approval of the CoC under Section 12A of the IBC and Regulation 30A(1)(b) of the Insolvency Resolution Process for Corporate Persons Regulations. Section 12A allows for the withdrawal of a corporate insolvency resolution process (CIRP) with the approval of 90% of the voting share of the CoC. This ruling emphasizes that once the CoC is formed, its consent is mandatory for any withdrawal of the insolvency proceedings, ensuring that the interests of all financial creditors are duly considered in such decisions. The judgment reinforces the collective decision-making authority of the CoC in the CIRP.