IBC Laws| www.ibclaw.

in

I. Case Reference

Case Citation : (2018) ibclaw.in 188 NCLAT

Consolidated Engineering Company & Anr. Vs. Golden Jubilee Hotels
Case Name :
Pvt. Ltd.
Appeal No. : Company Appeal (AT) (Insolvency) No. 501 of 2018
Judgment Date : 12-Dec-18
Court/Bench : NCLAT New Delhi
Act : Insolvency & Bankruptcy Code 2016
Present for Appellant(s) : Mr. Abir Roy, Advocate
Present for Respondent(s) : Mr. Y. Suryanarayana, Advocate
Chairperson : Mr. Justice S.J. Mukhopadhaya
Member (Judicial) : Mr. Justice Bansi Lal Bhat
II. Brief about the decision
NCLAT held that Prima facie we are of the view that the Adjudicating Authority has rightly held that
10% of total debt for the purpose of representation in ‘’Committee of Creditors’ is to be calculated
on the basis of the claim as collated and noticed by the ‘resolution professional’. It cannot be based
on amount claimed by all the ‘Operational Creditors’, till it is verified and compared. If the claim of
‘Operational Creditors, on verification is found to be less than 10%, the ‘Operational Creditors’ have
no right to claim representation in the meeting of the ‘Committee of Creditors’. However, taking into
consideration facts and circumstances of case, we allow the representative of ‘Operational Creditor’
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.

III. Full text of the judgment

ORDER
12.12.2018 Prima facie we are of the view that the Adjudicating Authority has rightly held that 10%
of total debt for the purpose of representation in ‘’Committee of Creditors’ is to be calculated on the
basis of the claim as collated and noticed by the ‘resolution professional’. It cannot be based on
amount claimed by all the ‘Operational Creditors’, till it is verified and compared. If the claim of

09.02.23 Page: 1
 IBC Laws| www.ibclaw.in

‘Operational Creditors, on verification is found to be less than 10%, the ‘Operational Creditors’ have
no right to claim representation in the meeting of the ‘Committee of Creditors’. However, taking into
consideration facts and circumstances of case, we allow the representative of ‘Operational Creditor’
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.
The appeal stands disposed of with aforesaid observations.
[Justice S.J. Mukhopadhaya]
Chairperson
[ Justice Bansi Lal Bhat ]
Member (Judicial)

09.02.23 Page: 2