### Reconstitution of Committee of Creditors does not automatically invalidate prior procedural orders or status of Resolution Professional.

In brief

The question

Whether the acts and constitution of the CoC and the appointment of the RP are rendered null and void once the initial constitution of the CoC is set aside by the Adjudicating Authority.

The court held

The NCLAT dismissed all three appeals, finding no merit in the challenge.

It also directed

The Court held that the appeals against the recording of the first CoC (I.A. 2154 and 1712) did not survive as they merged into the reconstitution process.

The order confirming the RP (I.A. 1716) was upheld as procedural.

The Appellant was directed to raise any substantive grievances regarding the current CoC constitution in the pending I.A. 76/2025 before the Adjudicating Authority.

No costs were awarded.

01Facts

The Appellant (SASF) filed a Section 7 IBC petition against the Corporate Debtor (CD) in 2018.

¶ 2.1(a)-(c)

Respondent No. 2 filed a subsequent petition (CP 124/2023) under which the CD was admitted to CIRP on 16.04.2024.

¶ 2.1(a)-(c)

The IRP/RP admitted only ₹121.32 crores of the Appellant’s ₹3,642 crore claim, granting them a 12.42% voting share in the CoC.

¶ 2.1(g)

The Appellant challenged this in I.A. 1418/2024.

On 18.12.2024, the Adjudicating Authority (NCLT) set aside the CoC's proportional representation and directed the RP to reconsider the claims and reconstitute the CoC.

¶ 2.2(b)

On 03.01.2025, the RP revisited the claim but reaffirmed the original amount (₹121 crores) and filed I.A. 76/2025 to record the new constitution.

¶ 2.2(c)

In the impugned order dated 08.05.2025, the NCLT disposed of earlier applications (I.A. 1712, 1716, 2154 of 2024) regarding the initial CoC and RP confirmation while keeping I.A. 76/2025 pending.

¶ 3

The Appellant appealed these disposals.

02Issues

i.Whether the acts and constitution of the CoC and the appointment of the RP are rendered null and void once the initial constitution of the CoC is set aside by the Adjudicating Authority.

¶ 5

ii.Whether the appeals against I.A. 1712/2024 and I.A. 2154/2024 survive following the subsequent order for reconstitution and the filing of I.A. 76/2025.

¶ 7.1-7.2

03Law Applied

The court primarily applied Regulation 14 of the CIRP Regulations, 2016, which empowers the RP to determine and revise claim amounts based on the best available estimate or additional information.

¶ 2.2(b)

It considered Regulation 12(3) of the CIRP Regulations, which provides that a financial creditor becomes a member of the CoC only from the time its claim is admitted.

¶ 6.1

The court distinguished the precedent *Edelweiss Asset Reconstruction Company Ltd. v. Mohit Goyal*, noting that the invalidation of a CoC affects prior actions differently when a creditor was merely under-represented as opposed to being entirely excluded.

¶ 5, 7.2

04Reasoning

The Tribunal reasoned that since the Appellant was always a member of the CoC (seeking a higher voting share rather than initial entry), the setting aside of the CoC's "proportional representation" did not automatically nullify every prior act or the RP's status.

¶ 6.1, 7.2

Regarding I.A. 2154 and I.A. 1712 of 2024, the Tribunal found they had been superseded by the NCLT’s order dated 18.12.2024 and the RP’s subsequent reconstitution filed under I.A. 76/2025; thus, those specific appeals were infructuous.

¶ 7.1-7.2

Regarding the RP’s confirmation (I.A. 1716/2024), the court held it was a procedural rather than adversarial order.

The Appellant failed to challenge the RP’s post-remand decision of 03.01.2025 which reaffirmed the lower claim amount, meaning the Appellant could not demonstrate continuing prejudice in the context of the procedural orders.

¶ 7.3

05Holding

The NCLAT dismissed all three appeals, finding no merit in the challenge.

¶ 8

The Court held that the appeals against the recording of the first CoC (I.A. 2154 and 1712) did not survive as they merged into the reconstitution process.

¶ 7.2

The order confirming the RP (I.A. 1716) was upheld as procedural.

The Appellant was directed to raise any substantive grievances regarding the current CoC constitution in the pending I.A. 76/2025 before the Adjudicating Authority.

¶ 7.3

No costs were awarded.

¶ 8

LawLens.NCLAT

Original Court PDF