Meeting of Committee of Creditors under Section 24 IBC

The Insolvency and Bankruptcy Code, 2016 (IBC) introduced a modern, time-bound system to resolve insolvency in India. At the centre of this process is the Committee of Creditors (CoC) — a body of financial creditors that drives the decision-making during the Corporate Insolvency Resolution Process (CIRP).

Every major decision related to the debtor’s future—whether to continue the business, replace the Resolution Professional, or approve a resolution plan—is taken through meetings of the CoC. These meetings are guided by Section 24 of the IBC and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

This article explains in detail the purpose, procedure, quorum, voting, and legal framework of CoC meetings under Section 24, along with their overall importance in the insolvency process.

Importance of CoC Meetings in the Insolvency Process

The CoC acts as the decision-making authority in the CIRP. Its meetings allow financial creditors to come together, review the corporate debtor’s situation, and decide on the best resolution strategy.

These meetings are not just formal gatherings; they are the backbone of the insolvency process. The CoC evaluates the viability of the business, considers various resolution plans, and ensures that the process aligns with the goal of maximising the value of assets.

Section 24 ensures that such meetings are held transparently, fairly, and efficiently.

Legal Framework: Section 24 of the Insolvency and Bankruptcy Code

Section 24 of the IBC lays down the statutory rules governing the meetings of the Committee of Creditors. It defines who can attend, who can vote, how meetings are conducted, and the responsibilities of the Resolution Professional (RP).

Let’s understand each provision of Section 24 in simple terms.

Sub-section (1): Manner of Holding Meetings

Section 24(1) allows members of the CoC to meet in person or through electronic means such as video conferencing or other technology platforms approved by the Board.

This flexibility makes the process practical and time-efficient, especially in large cases involving multiple creditors from different parts of India or abroad.

The ability to hold virtual meetings has become even more relevant after the pandemic, ensuring that proceedings continue without unnecessary delay.

Sub-section (2): Conducted by the Resolution Professional

According to Section 24(2), all meetings are conducted by the Resolution Professional (RP).

The RP acts as the chairperson and facilitator of the meeting. It is the RP’s duty to convene meetings, send notices, prepare the agenda, and record the minutes. The RP does not have voting rights but ensures the process is carried out in accordance with the IBC and IBBI Regulations.

Sub-section (3): Notice of the Meeting

Before every meeting, the RP must send a formal notice to certain persons as specified in Section 24(3). These are:

1. Members of the Committee of Creditors, including their authorised representatives as mentioned in Section 21(5), (6), and (6A);
2. Members of the suspended Board of Directors or partners of the corporate debtor; and
3. Operational creditors or their representatives where the total amount due to them is 10% or more of the total debt.

The notice must clearly mention:

• The date, time, and venue of the meeting,
• The agenda items to be discussed, and
• All relevant supporting documents for informed decision-making.

This ensures transparency and allows all participants to prepare adequately before the meeting.

Sub-section (4): Attendance Without Voting Rights

Section 24(4) provides that the suspended directors, partners, and representatives of operational creditors may attend the meeting but cannot vote.

Their participation keeps them informed about the proceedings and the future of the company. However, they do not have a say in the decision-making process since only financial creditors hold voting rights.

The absence of such persons does not affect the validity of the meeting or its decisions.

Sub-section (5): Representation through Another Insolvency Professional

Any creditor who is a member of the CoC may appoint another insolvency professional (other than the RP) to represent them in the meeting.

However, the fees for such representation are to be borne by the creditor who appoints the professional.

This provision ensures that every creditor, especially those who may not have expertise in insolvency law, can have informed representation during deliberations.

Sub-section (6): Voting Rights of Creditors

Each creditor votes in proportion to their voting share, which is based on the financial debt owed to them by the corporate debtor.

For example, if a bank has financed 40% of the total debt, it carries 40% of the voting share in CoC decisions. This system ensures fairness and proportionality in the decision-making process.

Sub-section (7): Determining Voting Share

The Resolution Professional is responsible for determining the voting share of each creditor according to the formula prescribed by the IBBI. This avoids confusion or disputes regarding each creditor’s influence in the voting process.

Sub-section (8): Conduct of Meetings

The meetings are to be conducted in the manner specified by the Board, i.e., the Insolvency and Bankruptcy Board of India (IBBI).

Regulations 18 and 22 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 elaborate on the process, quorum, and frequency of meetings.

First Meeting of the Committee of Creditors

The first meeting of the CoC holds special significance as it sets the tone for the entire resolution process.

Timeline

The first meeting must be convened within seven days of the constitution of the CoC.

Chairperson

It is chaired by the Interim Resolution Professional (IRP), who was appointed when the CIRP began.

Key Agenda

The primary purpose of this meeting is to decide whether the IRP should continue as the Resolution Professional (RP) or be replaced by another insolvency professional.

The decision requires a 66% majority vote of the financial creditors based on their voting shares.

Once confirmed, the RP continues to manage the affairs of the corporate debtor and conduct all future CoC meetings.

Frequency of Meetings and Right to Request

As per Regulation 18, the RP can convene CoC meetings as and when necessary.

However, if members holding at least 33% of the voting rights request a meeting, the RP is obliged to call one. This ensures that the CoC remains an active participant in the resolution process, rather than a passive body.

Notice Requirements and Contents

Every meeting must be preceded by a proper notice that includes:

• Meeting details: date, time, and venue (including electronic access links if held virtually);
• Agenda: list of matters to be discussed or voted upon;
• Supporting documents: background material for each agenda item.

The notice is generally sent at least five days before the meeting, though the CoC may choose to reduce this period in urgent situations.

Quorum for the Meeting

Regulation 22 defines the minimum attendance required (quorum) for a CoC meeting.

A meeting is quorate if members representing at least 33% of the voting rights are present, either physically or via video conferencing.

If the quorum is not met, the meeting is automatically adjourned to the next day at the same time and place. The adjourned meeting is valid irrespective of attendance, unless the CoC decides otherwise.

Voting Procedure and Thresholds

Decisions in a CoC meeting are taken by voting. Each financial creditor votes according to its voting share.

Voting may occur during the meeting or through electronic voting after the meeting concludes, depending on the complexity of the issue.

Key voting thresholds include:

• 66% majority required for critical matters such as appointing or replacing the RP, or approving the resolution plan;
• 51% majority for routine administrative decisions.

This majority is calculated based on the voting share of those creditors who actually vote, not on the entire CoC membership.

Participation of Non-Voting Members

While financial creditors form the CoC and hold voting rights, other stakeholders are also allowed to attend for transparency:

• Suspended directors or partners of the corporate debtor;
• Operational creditors whose dues are 10% or more of the total debt;
• Other participants or observers invited by the RP, if necessary.

They can provide inputs, but cannot vote on any matter.

Role of the Resolution Professional in CoC Meetings

The Resolution Professional plays a central administrative role in CoC meetings. The RP is not a decision-maker but a facilitator.

Their duties include:

• Convening and conducting meetings in compliance with Section 24;
• Preparing and circulating the agenda;
• Recording minutes and decisions;
• Ensuring confidentiality of sensitive information; and
• Executing the decisions taken by the CoC.

The RP’s neutrality and efficiency are essential for maintaining creditor confidence and procedural fairness.

Transparency and Record-Keeping

Every CoC meeting must be properly recorded. The RP maintains detailed minutes of the meeting, including the list of attendees, agenda items discussed, and the outcome of votes.

These records serve as official documentation and can be presented before the Adjudicating Authority (National Company Law Tribunal) if any dispute arises.

Conclusion

Meetings of the Committee of Creditors under Section 24 of the IBC are the backbone of the corporate insolvency resolution process. They enable collective decision-making, maintain creditor control, and ensure transparency throughout the process.

By detailing how meetings must be conducted, who can participate, and how votes are counted, Section 24 ensures that insolvency resolution remains efficient and equitable.

When conducted properly, these meetings uphold the very purpose of the IBC—to maximise asset value, ensure fairness to all creditors, and revive viable businesses within strict timelines.