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TMI Blog2023 (4) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... ture and it is incumbent upon the RP to serve notice to all the Operational Creditors of each meeting of the CoC or if they elect their authorised representatives after notice is received by them, then the notice of meeting to the authorised representatives. There is no question of otherwise knowledge acquired of the meetings of the CoC by the Operational Creditors as has been argued by Counsel for Respondent No. 1. It is also true that in view of Section 24(4) the Operational Creditor or their representatives shall not have a right to vote in each meeting of the CoC in which they participate and in case they remain absent despite notice then they cannot rake up a dispute for getting the proceeding invalidated on that account. It is held that it is incumbent upon the RP to serve notice of each meeting of the CoC to the Operational Creditors or their representatives if the amount of the aggregated due is not less than 10% of the debt. Since, in this case, it is found that no notice was given by the RP to the Operational Creditors, therefore, it is a dereliction of duty on his part for which he deserves to be burdened with costs. The cost is assessed at Rs. 1 Lakh which shall be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.85 Operational creditors 34.19 24.98 Statutory Dues 8.50 4.61 Claims filed by workman 4.87 4.19 Other Creditor (other than financial and operational ) 0.73 0.35 Total 237.39 223.10 3. The RP obtained the valuation of the fixed assets, the securities and financial assets and during the period of CIRP issued Form-G for inviting Expression of Interest (EOI). He received EOIs from three Prospective Resolution Applicants (PRAs) which was evaluated on the evaluation matrix in the 17th meeting of CoC held on 08.06.2021 and e-voting conducted on 21.08.2021. The plan submitted by the Respondent No. 3 KLJ Resources Ltd. was approved with the voting share of 96.38% and compliance certificate Form-H was issued by the RP. In the resolution plan, approved by the CoC, Operational Creditors (other than workmen and statutory dues) has been given 1.00% (approx.) of the to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 24(3)(c) and 24(4) of the Code for not issuing notice to the Appellants despite the fact that the Appellant as a class (Operational Creditors) are having the debt exceeding 10%. 7. Counsel for the Appellant has vehemently argued that as per Section 18(1)(b) of the Code, it is the duty of the IRP to receive and collate all the claims submitted by the Creditors to him. It is further submitted that the IRP had collated the claims of the Financial Creditors, Operational Creditors, Statutory Dues, Claims filed by workman other Creditor (other than financial and operational). The Operational Creditor submitted a claim of Rs. 34.19 Crores out of which he admitted 24.98 Crores which is admittedly more than 10% of the total claims. He has then referred to Section 24(3)(c) of the Code to contend that it is mandatory duty of the RP to give notice of each meeting of the CoC to the Operational Creditors or their representatives if the amount of aggregate due is not less than 10% of the debt. He has further submitted that even though it is provided in Section 24 that the Operational Creditors may not be having the right to vote in such meetings but they certainly have a right to watch t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its plan by voting share of 96.38%. He has thus submitted that his plan may not be set aside. 10. We have heard Counsel for the parties and perused the record. 11. Admitted facts are that the present Appellants are part of Operational Creditors whose claim is cumulatively admitted to be Rs. 24.98 Crore which is more than 10% of the admitted debt of the Corporate Debtor. There is also no denial of the fact that the RP did not issue notice to the Operational Creditors in terms of Section 24(3)(c) of the Code. It is also a fact that even if notice had been given to the Operational Creditors even then they had no right to vote in the meeting of the CoC in view of Section 24(4) of the Code but the question herein arises is as to whether is it not mandatory on the part of the RP to issue notice to all the Operational Creditors in terms of Section 24(3)(c) of the Code if it is found by him that their admitted claim is more than 10%? 12. In this regard, it would be relevant to refer to Section 24 of the Code which is reproduced as under: - Section 24: Meeting of committee of creditors. (1) The members of the committee of creditors may meet in person or by such electron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount aggregated is not less than 10% of the debt. Section 24(4) says that the directors or partners and representative of Operational Creditors who are mentioned in sub-section (3) may attend the meetings of CoC but shall not have any right to vote in such meetings and in case they remain absent despite notice then the proceedings of the CoC shall not be invalidated on that account. 14. A bare reading of the aforesaid provision i.e. Section 24(3)(c) shows that it is mandatory in nature and it is incumbent upon the RP to serve notice to all the Operational Creditors of each meeting of the CoC or if they elect their authorised representatives after notice is received by them, then the notice of meeting to the authorised representatives. There is no question of otherwise knowledge acquired of the meetings of the CoC by the Operational Creditors as has been argued by Counsel for Respondent No. 1. It is also true that in view of Section 24(4) the Operational Creditor or their representatives shall not have a right to vote in each meeting of the CoC in which they participate and in case they remain absent despite notice then they cannot rake up a dispute for getting the proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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