As per Section 21 (8) of the Insolvency and Bankruptcy Code 2016, all decisions of the ‘committee of creditors’ are required to be taken by a vote of not less than 75% of the voting share of the ‘Financial Creditors’.
The said ratio was delivered by the National Company Law Appellate Tribunal in the matter of Kaminemi Steel and Power India Private Limited Vs. Indian Bank and Others, Company Appeal (AT) (Insolvency) No. 45/2018 decided on 06.09.2018.
In the present appeal, the only limited issue before this Ld. Tribunal was that whether the decision of the adjudicating authority to liquidate the corporate debtor on the basis of ‘Resolution Process’ approved by the ‘Committee of Creditors’ with 66.57% is valid, instead of 75% of the voting shares of ‘Committee of Creditors’.
The Ld. Appellate Authority held from the plain reading of Section 21 of the I&B Code 2016, it is clear that all the decisions of the ‘Committee of Creditors’ is required to be taken by a vote of not less than 75% of the voting shares of the ‘Financial Creditors’, including the approval of the ‘Resolution Plan’.
The Tribunal further observed that sub rule (8) of Section 21 of the Code is mandatory in nature and any plan which has not been approved by the ‘Committee of Creditors’ with voting share of 75%, can not be approved by the adjudicating authority as it will be against the provisions of Section 30(2)€ of the I&B Code 2016, which stipulates the ‘Resolution Plan’