NCLAT gives NCLT 15 days to decide Epic Yarns insolvency withdrawal

Indian Opinion Analysis

Section 12A of the IBC was introduced in 2018 to allow withdrawal of insolvency proceedings after admission if creditors agree. The 2026 amendment made withdrawal harder by requiring 90% approval from the Committee of Creditors even when a settlement exists, a threshold smaller companies often struggle to meet. EPFO claims rank above most creditors under the IBC waterfall, so Epic Yarns may need to settle this Rs 1.29 crore liability alongside the original Rs 3.07 crore corporate debt to fully exit CIRP. The NCLAT's 15-day deadline now puts pressure on the Mumbai NCLT to apply the amended rules swiftly, testing whether genuine pre-admission settlements can still be honoured post-amendment. The next signal is whether the NCLT accepts the Section 12A application or insists on formal CoC voting first.