Prabhu Polyesters Ltd. is undergoing Corporate Insolvency Resolution Process as per Insolvency and Bankruptcy Code, 2016. Committee of Creditors is constituted. In the mean time, the Corporate Debtor, Prabhu Polyesters L

As per new Section 12A of the Insolvency & Bankruptcy Code, the Adjudicating Authority may allow the withdrawal of application, on making an application by the applicant with the approval of 90% voting share of the Committee of Creditors. Pursuant to Regulation 30 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, such an application for withdrawal after constitution of CoC can be made by the applicant through interim resolution professional or resolution professional as the case may be. Sub-regulation (2) provides that the application shall be made in Form FA of the Schedule-I accompanied by a bank guarantee- (a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) of sub regulation (1); or (b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31, till the date of filing of the application under clause (b) of sub-regulation (1). Such an application shall be considered by CoC within seven days of its receipt. Where such an application is approved by the committee with ninety percent voting share, the resolution professional shall submit such application along with the approval of the committee, to the Adjudicating Authority on behalf of the applicant, within three days of such approval. The Adjudicating Authority may, by order, approve the application submitted pursuant to which the applicant shall deposit an amount, towards the actual expenses incurred for the purposes referred to in clause (a) or clause (b) of sub-regulation (2) till the date of approval by the Adjudicating Authority, as determined by the interim resolution professional or resolution professional, as the case may be, within three days of such approval, in the bank account of the corporate debtor, failing which the bank guarantee received under sub-regulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code. Advice to Prabhu Polyesters Ltd.: Prabhu Polyesters Ltd. can withdraw its CIRP application, but it must follow the procedure laid down in Section 12A of the IBC and Regulation 30 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The key steps would be: The applicant financial creditor must make an application for withdrawal. This application requires the approval of the Committee of Creditors (CoC) with a minimum of 90% voting share. The application must be submitted through the Interim Resolution Professional or Resolution Professional, as the case may be, in Form FA, accompanied by a bank guarantee for estimated expenses. Upon approval by the CoC, the Resolution Professional will submit the application to the Adjudicating Authority (NCLT). The NCLT, if satisfied, may approve the withdrawal, subject to the deposit of actual expenses incurred. Therefore, Prabhu Polyesters Ltd. should work with the applicant financial creditor and the CoC to secure the necessary 90% approval for withdrawal.