The Ripple Effect Of Sec 12A Of The Insolvency And Bankruptcy Code, 2016, On The CIRP

The Ripple Effect Of Sec 12A Of The Insolvency And Bankruptcy Code, 2016, On The Corporate Insolvency Resolution Process

Joshua Kurien George, School of Law, CHRIST (Deemed to be University), Bengaluru

ABSTRACT

The Insolvency and Bankruptcy Code (Second Amendment) Act of 2018 played a pivotal role in bringing about many crucial changes to the Insolvency and Bankruptcy Code of 2016 (IBC/Code). One such major change was the insertion of Sec 12A into the legislation. With the inclusion of Sec 12A into the Code, now financial creditors (Sec 7, IBC), operational creditors (Sec 9, IBC) and the corporate debtor, themselves (Sec 10, IBC) can withdraw their application of the Corporate Insolvency Resolution Process (CIRP) before the Adjudicating Authority, after an approval of 90% of voting share by the Committee of Creditors. Prior to this, various parties tried for the same and reached the Supreme Court, and eventually, a change was brought. This article will review the same and its impact on the Corporate Insolvency Resolution Process as a whole, from a very practical perspective with the help of scholarly opinions and case laws.

Keywords: CIRP, financial creditors, operational creditors, corporate debtor, pre-admission withdrawal, post-admission withdrawal