2018 (12) TMI 1978 - AT - Insolvency and Bankruptcy

Right of Operational Creditors to claim representation in the meeting of the Committee of Creditors - HELD THAT - Taking into consideration facts and circumstances of case, the representative of Operational Creditor allowed only to watch the proceedings of the Committee of Creditors as agreed by the learned counsel for the Resolution Professional . The representative cannot object or participate in the proceedings of the Committee of Creditors and if any contrary decision is taken, in such case, the Operational Creditor may move proper application before appropriate forum at proper stage. Operational Creditor may obtain the name of the representative who may watch the proceedings - This order cannot be cited as precedence in any other case. Appeal disposed off.

Summary

Issues involved:
Calculation of representation in 'Committee of Creditors' for Operational Creditors.

Analysis:
The judgment by the National Company Law Appellate Tribunal, New Delhi, addressed the issue of calculating the representation of 'Operational Creditors' in the 'Committee of Creditors'. The Tribunal held that the Adjudicating Authority was correct in determining that 10% of the total debt for representation in the Committee should be based on the claim collated and noticed by the resolution professional, not on the total amount claimed by all Operational Creditors until verified and compared. If after verification, the claim of Operational Creditors is less than 10%, they do not have the right to claim representation in the Committee. However, in this specific case, the Tribunal allowed the representative of the Operational Creditor to only observe the proceedings of the Committee, without the right to object or participate, as agreed by the Resolution Professional. The judgment emphasized that any contrary decision taken by the Operational Creditor could be challenged through the appropriate forum at the proper stage. The Operational Creditor was also permitted to obtain the name of the representative who would observe the proceedings. It was explicitly stated that this order should not be considered as a precedent in any other case. The appeal was disposed of based on these observations.