Chapter II - Corporate Insolvency Resolution Process
Section 12A
Section 12A: withdrawal of admitted CIRP application
The 2026 substituted Section 12A permits an admitted CIRP application to be withdrawn only in a defined window: after the committee of creditors is constituted and before the first invitation for resolution plans, with 90% voting-share approval and an application by the resolution professional.
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This article is for general information. Refer to the Insolvency and Bankruptcy Code, 2016 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Subject to sub-section (2), the Adjudicating Authority may allow the withdrawal of an application admitted under section 7, 9 or 10, on an application made by the resolution professional, with the approval of ninety per cent. voting share of the committee of creditors in such manner as may be specified.
(2) Notwithstanding anything contained in any law for the time being in force, an application admitted under section 7, 9 or 10 shall not be withdrawn—
(a) before the constitution of the committee of creditors under sub-section (1) of section 21; and
(b) after the first invitation for submission of a resolution plan has been issued by the resolution professional.
(3) The Adjudicating Authority shall pass an order under sub-section (1) within a period of thirty days from the date of receipt of the application:
Provided that if the Adjudicating Authority has not passed an order within such period, it shall record the reasons for such delay in writing.
Introduction
This section was wholly substituted by Section 8 of the Insolvency and Bankruptcy Code (Amendment) Act, 2026, which commenced on 26 May 2026. Older descriptions of withdrawal before committee constitution or after a first plan invitation do not state the substituted rule. The section sets statutory limits; the current IBBI regulations govern the specified manner of application.
Key takeaways
A narrow statutory window
Withdrawal cannot occur before the committee of creditors is constituted or after the first invitation for resolution plans has been issued.
Committee approval and professional's application
The resolution professional applies, with approval from creditors holding 90% of the committee's voting share.
Tribunal decision, with reasons for delay
The adjudicating authority has a thirty-day period to pass an order after receiving the application and must record reasons if it misses that period.
Check whether the process is in the withdrawal window
Confirm the CIRP application was admitted and the committee of creditors constituted. Establish whether the resolution professional has issued the first invitation for submission of a resolution plan. Both milestones matter under subsection (2).
Obtain the committee vote
An applicant's settlement with the debtor alone does not meet Section 12A. The committee of creditors must approve withdrawal by ninety per cent of its voting share, and the resolution professional makes the application in the specified manner.
Track the tribunal's order
The statutory thirty-day direction runs from receipt of the withdrawal application. A missed period requires recorded reasons; the section does not say that the application is automatically allowed after thirty days.
Practical checklist
Do
- Confirm admission, committee constitution and the status of the first resolution-plan invitation.
- Record the committee's voting-share calculation and its withdrawal decision.
- Use the current IBBI regulation and form for the application through the resolution professional.
Avoid
- Do not rely on a pre-2026 description permitting withdrawal before committee constitution.
- Do not treat a private settlement or the expiry of thirty days as automatic withdrawal.
Glossary
- Committee of creditors
- The committee constituted under Section 21 to exercise creditor voting rights during CIRP.
- Voting share
- A financial creditor's proportion of voting rights in the committee, as defined by Section 5(28).
- Resolution professional
- The insolvency professional conducting CIRP and submitting the withdrawal application under current Section 12A.
Frequently asked questions
Can an admitted CIRP be withdrawn before the committee of creditors exists?
The substituted Section 12A(2)(a), effective 26 May 2026, says an admitted application shall not be withdrawn before the committee is constituted. Transitional issues for older proceedings require case-specific review.
Is 90% of all creditors needed?
Section 12A(1) requires approval representing ninety per cent of the committee of creditors' voting share.
Is withdrawal automatic after a settlement?
No. The resolution professional must apply with the required committee approval during the statutory window, and the adjudicating authority may allow withdrawal by order.
Need help applying this provision to your situation?
Contact BizeneedLast updated 9 October 2026