In a corporate insolvency, the NCLT starts the process and approves the result, but the real decisions are taken by the committee of creditors (CoC). The committee decides whether to approve a resolution plan, whether to extend the process, whether to replace the resolution professional, whether to allow a settlement and withdrawal, and whether the company should be liquidated. Its commercial decisions are largely beyond challenge.
That makes a seat on the committee valuable, and voting decisions consequential. A private lender with 8% of the vote may hold the key to a 90% withdrawal decision. A homebuyer class may hold the majority. Banks have internal approval processes that must keep pace with meeting schedules. This page explains how the committee works and how we advise members.
हिंदी में सारांश
दिवाला पà¥à¤°à¤•à¥à¤°à¤¿à¤¯à¤¾ में असली फैसले कमेटी ऑफ कà¥à¤°à¥‡à¤¡à¤¿à¤Ÿà¤°à¥à¤¸ (CoC) लेती है, जिसमें कंपनी के वितà¥à¤¤à¥€à¤¯ लेनदार होते हैं। हर सदसà¥à¤¯ का वोट उसके सà¥à¤µà¥€à¤•à¥ƒà¤¤ दावे के अनà¥à¤ªà¤¾à¤¤ में होता है। रेज़ोलà¥à¤¯à¥‚शन पà¥à¤²à¤¾à¤¨ की मंज़ूरी के लिठ66% और समà¤à¥Œà¤¤à¥‡ से वापसी (धारा 12A) के लिठ90% वोट चाहिà¤à¥¤ घर खरीदार à¤à¤• "कà¥à¤²à¤¾à¤¸" के रूप में अपने अधिकृत पà¥à¤°à¤¤à¤¿à¤¨à¤¿à¤§à¤¿ के ज़रिठवोट करते हैं। संबंधित पकà¥à¤· (related party) लेनदारों को वोट का अधिकार नहीं होता।
Is this your situation?
- You are a financial creditor of a company that has been admitted into insolvency
- You received notice of the first committee meeting and want to know your role
- Your claim was admitted at a lower amount, reducing your vote
- You must vote on a resolution plan, a settlement or liquidation
- You are a homebuyer represented by an authorised representative and want to influence the vote
- You suspect another creditor is a related party of the company
How the committee is formed
Financial creditors only
The committee consists of all financial creditors of the company, with voting share in proportion to their admitted financial debt. Operational creditors are generally not members, though representatives may attend in some cases without a vote.
Related parties excluded
A financial creditor that is a related party of the company has no right to representation, participation or voting in the committee. The Supreme Court has also looked at creditors who were related parties in substance at the time of lending.
Classes and authorised representatives
Homebuyers, deposit holders and other classes of financial creditors vote through an authorised representative, an insolvency professional chosen by the class. The representative must follow the class's instructions.
First meeting
The interim resolution professional constitutes the committee after collating claims and holds the first meeting within seven days of constitution. At that meeting the committee decides whether to confirm the interim professional or appoint another as resolution professional.
The professional's role
The resolution professional runs the company and the process but takes major decisions only with the committee's approval.
Suspended directors attend
Members of the suspended board may attend meetings and participate, without voting.
What the committee votes on
| Decision | Votes needed | Note |
|---|---|---|
| Appointing or replacing the resolution professional | 66% | Section 22 and Section 27 |
| Extending the process beyond 180 days | 66% | Up to 90 more days; outer limit 330 days |
| Approving a resolution plan | 66% | Section 30(4) |
| Allowing withdrawal under Section 12A | 90% | Only after the committee is formed and before the first invitation for plans |
| Major decisions under Section 28 (new borrowing, asset sales, related-party deals, change of management) | 66% | The professional cannot act without approval |
| Liquidation before plan approval | 66% | Section 33(2) |
| Restoring a failed process (2026 amendment) | 66% | One-time restoration, up to 120 days |
| Replacing the liquidator (2026 amendment) | 66% | Subject to the IBBI-linked process |
Questions members often face
Is my claim correctly admitted?
Your voting share depends on the admitted amount. If interest or principal has been cut, raise it immediately with the professional and, if needed, with the NCLT. See file your claim.
Should we confirm the interim professional?
Look at experience in the sector, fee proposals and conduct so far. Replacing a professional mid-way is possible but disruptive.
How should we evaluate plans?
Beyond headline value, look at upfront cash, deferred payments, security for deferred amounts, treatment of different creditors, implementation risk and the bidder's track record.
Do we owe duties to other stakeholders?
The committee's commercial wisdom is respected, but plans must still comply with Section 30(2), including minimum payments to operational and dissenting creditors.
Can we be challenged?
Committee decisions can be challenged before the NCLT and NCLAT on legal grounds, such as non-compliance with the Code, discrimination without basis or material irregularity, but not merely on commercial merit.
What about confidentiality?
Members receive the information memorandum and plans under confidentiality obligations. Breaches can have consequences.
How we support committee members
Review of the case file
We read the admission order, the information memorandum, the list of creditors and the minutes so far, and explain the state of play in a short note.
Claim and voting share check
We check whether your claim and classification are correct and whether any member should be excluded as a related party.
Meeting preparation
Before each meeting, we review the agenda and documents and advise on the legal implications of each resolution, so your internal approvals can be obtained in time.
Evaluating plans and settlements
We compare resolution plans for legal compliance and risk, and advise on settlement proposals under Section 12A.
Representation before the NCLT
If the committee's decisions are challenged, or if you need to challenge the professional's conduct, we appear before the NCLT and NCLAT.
The 2026 amendment and the committee
The 2026 amendment gives the committee new tools and responsibilities. It can apply to restore a failed process once, for up to 120 days, with 66% of the vote. It can approve asset-wise plans. It can request that the NCLT approve implementation of a plan first and distribution later. In liquidation, the committee now has a supervisory role and can replace the liquidator with 66% of the vote, and a resolution professional from the same process cannot become the liquidator.
The amendment also clarifies that a security interest exists only where it is created by agreement, not merely by operation of law. Statutory dues therefore do not rank as secured debts in the waterfall, which can change the economics of distribution for financial creditors.
Time and typical cost
Fees can be fixed per meeting, per stage or as a retainer for the process, agreed in writing. They do not depend on the outcome.
| Task | Usual time | What it involves |
|---|---|---|
| Initial briefing note | 3 to 5 days | Review of case file |
| Meeting-by-meeting advice | Throughout the process | Agenda review, legal notes |
| Plan evaluation | 1 to 3 weeks per round | Comparison, compliance review |
| NCLT applications or defence | As needed | Drafting and hearings |
Documents to share with us
Case documents
- Admission order and public announcement
- List of creditors and your admitted claim
- Information memorandum (under confidentiality)
Committee papers
- Notices, agendas and minutes of meetings
- Resolution plans and evaluation matrix
- Professional's reports and fee proposals
Your records
- Loan documents and security
- Internal approvals and delegation
- Correspondence with the professional
A minority lender with a blocking vote
Here's a made-up example. An NBFC held 12% of the voting share in the committee of a Delhi real estate company. The promoters reached a settlement with the bank that had filed the petition and sought withdrawal under Section 12A, which needs 90%.
The NBFC was offered far less than the bank. We advised it that its 12% share was enough to block the withdrawal and that the settlement, as structured, treated it unfairly. The NBFC communicated its position at the next committee meeting. The promoters revised the proposal to repay the NBFC on comparable terms, and the NBFC voted in favour.
Mistakes committee members make
- Late internal approvals: banks often need credit committee approvals before voting. Members who cannot vote in time lose influence over key decisions.
- Voting without reading the plan in full: headline values hide deferred payments, conditions and risks. Read the plan and the professional's compliance note.
- Ignoring legal minimums: a plan approved without meeting Section 30(2) can be rejected by the NCLT, wasting months. Ask the professional to confirm compliance in writing.
- Treating operational creditors as irrelevant: they cannot vote, but they can challenge a plan that pays them less than the law requires.
- Breaching confidentiality: information memoranda and plans are confidential. Leaks can have legal consequences and harm the process.
- Not recording reasons: committee decisions are respected, but minutes that show reasons and process help defend them if challenged.
Duties and accountability of the committee
The Supreme Court has repeatedly said that the committee's commercial wisdom deserves deference. That deference rests on the committee acting fairly and within the law. Tribunals have intervened where a committee discriminated between similarly placed creditors without reason, where it approved a plan that ignored statutory minimums, or where the process was conducted unfairly towards bidders.
In practice, good committees ask for written legal advice on major decisions, record their reasons, give every bidder the same information and timelines, and ensure the resolution professional's conduct is transparent. Members who sit on many committees, such as banks and ARCs, also benefit from consistency across cases. We help clients maintain this discipline, because a well-documented committee decision is much harder to overturn on appeal.
Key terms in plain words
| Term | What it means |
|---|---|
| Voting share | Each member's percentage of the total admitted financial debt |
| Related party | A person connected to the company, excluded from voting |
| Authorised representative | The professional who votes for a class such as homebuyers |
| Section 28 | The list of major decisions needing committee approval |
| Commercial wisdom | The principle that tribunals do not second-guess the committee's business judgment |
Checklist for a CoC member
- Confirm your admitted claim and voting share in the list of creditors
- Appoint a representative with authority to vote, and keep the authority letter on file
- Read the agenda and papers before each meeting
- Ask for the information memorandum and valuation reports, subject to confidentiality
- Note your vote and reasons in the minutes
- Check that the minutes record what was actually decided
- Track the CIRP timeline and extensions
- Keep track of the decisions you may want to challenge later
Related-party creditors and the CoC
Section 21(2) excludes a financial creditor that is a related party of the corporate debtor from the CoC. The Supreme Court in Phoenix ARC v Spade Financial Services (2021) held that the exclusion also applies to a creditor who is no longer a related party but became a creditor while it was one, or who structured the transaction to defeat the rule. The aim is to stop promoters controlling the CoC through friendly lenders.
Homebuyers and other creditors in a class vote through an authorised representative, who must vote according to the class members' instructions. Operational creditors are not members of the CoC unless there are no financial creditors, but representatives may attend meetings without voting rights where their dues are above a threshold. See homebuyers' rights and resolution plans.
A disputed voting share
Here's a made-up example. In the CIRP of a Lucknow hotel company, a lender held 30% of the voting share. Other creditors discovered that the lender had been part of the promoter group until a few months before the CIRP and had bought the debt from a bank shortly before filing.
The other creditors applied to the NCLT to exclude the lender from the CoC. Relying on Phoenix ARC, the NCLT held that the lender had acquired the debt while still a related party and could not vote. The voting shares of the remaining creditors were recalculated, and the CoC then considered resolution plans without the promoter-linked lender.
Frequently Asked Questions
Who sits on the committee of creditors?
Financial creditors of the company, with votes in proportion to their admitted financial debt. Related-party financial creditors cannot participate or vote.
Do operational creditors vote?
Generally no. Operational creditors are not members of the committee, though in some situations their representatives may attend without voting.
How do homebuyers vote?
As a class, through an authorised representative chosen from options in the claim form. The representative votes according to the class's instructions.
What vote is needed to approve a resolution plan?
At least 66% of the voting share.
Can the NCLT overturn the committee's choice of plan?
Not on commercial grounds. The tribunal checks legal compliance; the committee's commercial wisdom is respected.
Can the committee replace the resolution professional?
Yes, with 66% of the voting share, subject to the NCLT's approval of the new appointment.
What if my claim is under-admitted?
Raise it with the professional at once and, if not corrected, apply to the NCLT. Your voting share depends on it.
How are your fees decided?
Per meeting, per stage or as a retainer, agreed in writing. They do not depend on the result.
On a Committee of Creditors?
Share the case file and the next meeting's agenda. We will brief you on your rights, your vote and the legal implications of each decision.
This page gives general information about the law as it stood when it was last reviewed. It is not legal advice on your case and does not promise any result. IBC rules and NCLT procedures change often, so outcomes depend on your own documents, dates and facts.
Need help with Committee of Creditors (CoC) Representation?
Send us the notice, the petition or the order. We will tell you where you stand, which bench hears it and the date the next step is due, in plain words.
