This marks a clear shift from the earlier framework under the Insolvency and Bankruptcy Code, 2016. While Section 12A, introduced through a subsequent amendment, required 90 per cent CoC approval for withdrawal, courts had allowed considerable flexibility, permitting settlements and withdrawals at various stages of the process.
The 2026 amendment narrows this flexibility by statutorily defining the stages at which withdrawal is impermissible, thereby limiting late-stage settlements and preventing disruption of the resolution process once it has progressed.