IBC Section 24: Meeting of committee of creditors

Section 24 of Insolvency and Bankruptcy Code, 2016: Meeting of committee of creditors

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) The members of the committee of creditors may meet in person or by such electronic means as may be specified.

(2) All meetings of the committee of creditors shall be conducted by the resolution professional.

(3) The resolution professional shall give notice of each meeting of the committee of creditors to-

(a) members of committee of creditors, including the authorised representatives referred to in sub-sections (6) and (6A) of section 21 and sub-section (5);

(b) members of the suspended Board of Directors or the partners of the corporate persons, as the case may be;

(c) operational creditors or their representatives if the amount of their aggregate dues is not less than ten per cent. of the debt.

(4) The directors, partners and one representative of operational creditors, as referred to in sub-section (3), may attend the meetings of committee of creditors, but shall not have any right to vote in such meetings:

Provided that the absence of any such director, partner or representative of operational creditors, as the case may be, shall not invalidate proceedings of such meeting.

(5) Subject to sub-sections (6), (6A) and (6B) of section 21, any creditor who is a member of the committee of creditors may appoint an insolvency professional other than the resolution professional to represent such creditor in a meeting of the committee of creditors:

Provided that the fees payable to such insolvency professional representing any individual creditor will be borne by such creditor.

(6) Each creditor shall vote in accordance with the voting share assigned to him based on the financial debts owed to such creditor.

(7) The resolution professional shall determine the voting share to be assigned to each creditor in the manner specified by the Board.

(8) The meetings of the committee of creditors shall be conducted in such manner as may be specified.

1. Ins. by Act 26 of 2018, s. 16 (w.e.f. 6-6-2018).

2.The proviso ins. by s. 17, ibid. (w.e.f. 6-6-2018).

3. Subs. by s. 18, ibid., for "Committee of creditors" (w.e.f. 6-6-2018).

Legal Commentary & Landmark Judgments: Section 24

Section 24 prescribes the statutory rules governing the convening, notice requirements, and conduct of Committee of Creditors meetings.

Core Legal Standard: Section 24 mandates that all CoC meetings must be conducted by the Resolution Professional.
Judicial Powers & Orders: While suspended directors and operational creditors are entitled to attend and deliberate, they have zero voting rights.

This statutory framework establishes clear operational guidelines, balancing legal compliance with procedural safeguards.

Key Landmark Precedents:

Vijay Kumar Jain v. Standard Chartered Bank (2019) 20 SCC 455: The Supreme Court held that suspended directors have a statutory right to participate in CoC meetings and are entitled to receive all relevant documents, including resolution plans, to ensure meaningful participation, notwithstanding their lack of voting rights.

Legal Commentary:

Section 24 balances creditor exclusivity with procedural fairness. Granting suspended directors and major operational creditors a right of audience ensures that commercial discussions benefit from institutional knowledge without compromising financial creditor voting hegemony.