CoC Dharma (Role of Committee of Creditors-IBC, 2016)

Abstract

The Committee of Creditors (CoC) has been authorized under the IBC, similar to the Board of Directors, to make decisions concerning the corporate debtor, throughout the Corporate Insolvency Resolution Process (CIRP). As an integral part of this authorizing Code, the Adjudicating Authority, when initiating the CIRP for a company, designates a Resolution Professional, who oversees and implements all decision-making processes during the CIRP and thus administers the CIRP of the company. Within this authority, a significant aspect is the power of the CoC to review and subsequently approve a resolution plan pertaining to a company (As per sections 30 and 31 of the Code). This authorization is contingent upon the ultimate approval of the resolution plan by the respective Adjudicating Authority (Section 31 of the Code). During the Code's implementation, the Adjudicating Authority, followed by the National Company Law Appellate Tribunal and the Supreme Court of India, have consistently emphasized the “commercial wisdom” of the CoC in determining the subsequent steps for the corporate debtor thereby facilitating the resolution of the corporate debtor.