Consolidated Engineering Company & Anr vs Golden Jubilee Hotels Pvt Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 501 of 2018
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority's view is affirmed that, for the purpose of the 10% threshold for representation on the Committee of Creditors, the total debt is to be computed on the basis of the claims as collated and noticed by the resolution professional, and not on the amounts claimed by all operational creditors before those claims are verified and compared. Where the verified claims of operational creditors amount to less than 10% of the total debt, operational creditors have no right to representation in the meeting of the Committee of Creditors. Operational creditors whose claims fall below that threshold may nonetheless be permitted, as an indulgence on the facts of the case, to have a representative watch the proceedings of the Committee of Creditors, without any right to object to or participate in them; any aggrieved party may apply to the appropriate forum at the appropriate stage. The order is expressly confined to this case and is not to be cited as precedent.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
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 '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 -2-
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)
/ns/uk/
Company Appeal (AT) (Insolvency) No. 501 of 2018
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