A company, "ABC Ltd.", contributed ₹10 Lakhs to the Insolvency and Bankruptcy Fund to support the corporate restructuring framework, as enabled under Section 224 of the IBC, 2016. A financial creditor initiates Corporate

Section 224(3) of the IBC, 2016, allows a contributor to the Insolvency and Bankruptcy Fund to withdraw up to their contributed amount during insolvency proceedings if they are subject to such proceedings. This withdrawal is authorized by the Adjudicating Authority (NCLT) specifically for critical needs like paying workmen, protecting assets, or meeting incidental costs etc. The Adjudicating Authority, upon verification of the contribution and the necessity of the payment, permits the withdrawal. This provision ensures that companies in distress, which have previously supported the fund, can use those funds to maintain asset value and pay workers during insolvency. Section 224 (2) of the IBC provides that the following amounts shall be credited to the Insolvency and Bankruptcy Fund: the grants made by the Central Government for the purposes of the Fund; the amount deposited by persons as contribution to the Fund; the amount received in the Fund from any other source; and the interest or other income received out of the investment made from the Fund.