Committee of Creditors Under IBC: Formation, Voting and Duties (2026)

Once the National Company Law Tribunal (NCLT) admits a corporate debtor into the corporate insolvency resolution process (CIRP), one body effectively takes charge of every commercial decision that follows: the committee of creditors under IBC. If you are preparing for JAIIB, CAIIB or any IIBF certification that touches insolvency law, this is one of the highest-yield topics in the syllabus — it decides who controls a stressed company, how a rescue plan gets approved, and when a case tips into liquidation instead. This article walks through how the CoC is formed, who sits at the table, the voting thresholds that matter, and the duties that keep the process accountable.

📊 Constitution of the Committee of Creditors Under Section 21

The interim resolution professional (IRP) constitutes the committee of creditors under IBC only after collating claims received from creditors and determining the corporate debtor's financial position. Section 21(1) makes this a mandatory step, usually completed within the initial days of admission — a stage covered in detail in the chapter on the Commencement of CIRP.

Section 21(2) states that the CoC comprises all financial creditors of the corporate debtor. This is a deliberate legislative choice: financial creditors carry the credit risk and are best placed to judge viability, so the Code hands them the driver's seat rather than splitting control across every class of stakeholder.

A related-party proviso tempers this rule. A financial creditor who is a related party of the corporate debtor has no right of representation, participation or voting in the CoC — the idea being that insiders should not get to decide the fate of an entity they helped run. Where a corporate debtor has no financial creditors under Section 21(2), or where all of them are related parties, the committee is constituted in the manner prescribed by the CIRP Regulations, which can bring operational creditors into a representative structure.

Operational creditors do not otherwise sit on the CoC and carry no vote, but Section 24(3)(c) gives them a limited seat at the table: where the aggregate dues owed to operational creditors are not less than 10% of the total debt, they are entitled to receive notice of and attend CoC meetings, though still without a voting right. This threshold is a favourite trap in exam questions, so read it as "notice and attendance," not "vote."

🗳️ Voting Thresholds: Sections 28, 30(4), 12(2) and 33

Once formed, the committee of creditors under IBC does not act on simple majority for its most consequential calls. Section 28 lists specific actions the resolution professional cannot take without prior CoC approval by a vote of not less than 66% of the voting share — raising interim finance beyond specified limits, creating security interests over the corporate debtor's assets, undertaking related-party transactions outside the ordinary course of business, changing the capital structure, and similar structurally significant steps.

The single most important threshold in the whole Code is in Section 30(4): a resolution plan can only be approved by the CoC with not less than 66% of the voting share. The CoC must consider the plan's feasibility and viability, the manner of distribution proposed to different classes of creditors having regard to the order of priority under Section 53, and compliance with the CIRP Regulations before voting. This 66% figure also governs extension of the CIRP timeline under Section 12(2), replacement or confirmation of the resolution professional, and a CoC decision to liquidate the corporate debtor under Section 33(2) at any point before a resolution plan is approved.

Withdrawal of an admitted case under Section 12A sits apart from all of this — it needs a steeper 90% voting share, reflecting how disruptive an exit is once the CIRP machinery is already running; that mechanism is explored fully in the guide on withdrawal of CIRP under Section 12A. Day-to-day administrative matters — approving meeting minutes, routine professional fees, and similar housekeeping — are typically cleared by a simple majority under the CIRP Regulations rather than the heightened 66% bar.

💡 Exam Tip: Do not confuse the 66% threshold that governs Section 28, 30(4), 12(2) and 33(2) decisions with the 90% threshold reserved specifically for Section 12A withdrawal — examiners frequently swap these two numbers.

⚖️ Commercial Wisdom of the CoC and Judicial Deference

A recurring theme in IBC jurisprudence is that the committee of creditors under IBC exercises "commercial wisdom" that adjudicating authorities are not meant to second-guess. The Supreme Court's ruling in Committee of Creditors of Essar Steel India Ltd v. Satish Kumar Gupta (2019) is the anchor case here: it held that the CoC's commercial decision on whether and how to approve a resolution plan is not subject to judicial review on the merits. NCLT and NCLAT can examine whether the process complied with the Code and the CIRP Regulations — for instance, whether the plan meets the requirements of Section 30(2) or provides fair treatment across creditor classes — but they cannot substitute their own commercial judgment for that of the creditors.

This is a deliberate design choice reflected across the Code's structure, which you can trace back to the framework laid out in the Structure of the IBC chapter: Parliament wanted a time-bound, creditor-driven resolution process rather than one where courts weigh in on business viability. The doctrine has limits — the CoC still must act within the four corners of the statute, consider the interests of all stakeholders including operational creditors as required by Section 30(2), and cannot arbitrarily reject a compliant plan without reasons. If the CoC's 66% vote fails to produce an approved plan within the outer CIRP timeline, the case moves toward liquidation, a track covered separately in the piece on the liquidation process under IBC.

⚠️ Common Mistake: Candidates often assume NCLT can rewrite the commercial terms of an approved resolution plan. It cannot — its review is limited to legal compliance, not commercial merit.

📋 CoC Meetings, Duties and the Resolution Professional's Role

Section 24 governs how the committee of creditors under IBC actually meets. The resolution professional must give notice of every CoC meeting to all members, and, as noted earlier, to operational creditors that cross the 10% aggregate-dues mark under Section 24(3)(c). Voting can be conducted at the meeting or, where permitted, electronically, and the voting share of each financial creditor is proportionate to the amount of debt it holds relative to the total financial debt — so a creditor with a larger exposure carries proportionately greater weight in every 66% calculation.

The resolution professional is not a member of the CoC but is its administrative engine: convening meetings, placing resolution plans and Section 28 proposals before members, running the information memorandum process, and reporting outcomes to the NCLT. The interplay between the RP and the committee is set out in the chapter on the Roles and Duties of IRP and RP, and candidates should also revisit how the insolvency commencement date anchors the timeline within which the CoC must complete its work.

It is worth remembering that creditor-driven resolution under the CoC is one route among several India uses to deal with financial stress. Where the stressed entity is a bank rather than a corporate debtor, control does not pass to a committee of lenders at all — the Reserve Bank of India instead has statutory powers of supersession and management change, a distinct track examined in the guide on control over management of banking companies. It is also worth noting that a secured creditor's rights under SARFAESI operate on a separate enforcement track outside the CIRP framework once a moratorium is in force, though that interplay is a topic in its own right.

📌 Remember: The CoC does not "manage" the company day to day — that stays with the resolution professional; the CoC's job is to approve, reject, or direct the big commercial and structural decisions listed under the Code.

For the underlying regulatory text on voting mechanics and CoC procedure, refer to the CIRP Regulations published by the Insolvency and Bankruptcy Board of India at ibbi.gov.in.

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✅ Conclusion: Master the CoC for Your Next IIBF Exam

The committee of creditors under IBC sits at the centre of every corporate insolvency case — it decides who gets to run the rescue, whether a resolution plan survives, and when a company moves toward liquidation instead. For your JAIIB or CAIIB exam, lock in three things: the Section 21 constitution rule and the related-party exclusion, the recurring 66% threshold across Sections 28, 30(4), 12(2) and 33(2) versus the 90% bar under Section 12A, and the commercial-wisdom doctrine from the Essar Steel ruling. Revisit the chapter on Credit Recovery Laws for Banks for the broader context, browse more updates via the Insolvency and Bankruptcy Code 2016 tag, and then test yourself with a full CAIIB mock to see where you stand.