The Insolvency and Bankruptcy Code (IBC) of India provides a framework for resolving insolvency and bankruptcy cases. A crucial body within this framework is the Committee of Creditors (CoC). This module delves into the composition of the CoC and the voting rights of its members, which are fundamental to the Corporate Insolvency Resolution Process (CIRP).

The CoC is formed by the Interim Resolution Professional (IRP) or Resolution Professional (RP) within 30 days of the insolvency commencement date. It comprises all financial creditors of the corporate debtor. However, if the number of financial creditors exceeds 100, the CoC will consist of a maximum of 100 creditors, chosen by the financial creditors themselves. Operational creditors are not part of the CoC but can be represented by a financial creditor if they have a claim exceeding 10% of the total debt.

The voting rights of members in the CoC are determined by the amount of their financial debt. Each financial creditor has voting rights proportionate to their share of the financial debt. This means that creditors with larger financial stakes have a greater say in the decisions made by the CoC. This principle ensures that those who stand to lose the most financially have a commensurate influence on the resolution process.

The CoC is empowered to make several critical decisions during CIRP. These include approving or rejecting a resolution plan, deciding to liquidate the corporate debtor if no viable plan is presented, and appointing or removing the Resolution Professional. The threshold for approving a resolution plan is typically 66% of the voting share of the CoC.

The Resolution Professional acts as the facilitator and administrator of the CIRP. The RP convenes and chairs CoC meetings, provides information to creditors, and manages the submission and evaluation of resolution plans. While the RP guides the process, the ultimate decision-making power rests with the CoC.

Although operational creditors are not members of the CoC, they have a right to attend CoC meetings and be heard. Furthermore, if an operational creditor's claim exceeds 10% of the total debt, they can be represented by a financial creditor in the CoC. This ensures that significant operational creditors have a voice, albeit indirectly.

The CoC is central to the IBC's objective of time-bound resolution. By empowering financial creditors, who have the most significant financial interest in the corporate debtor, the IBC aims to facilitate efficient and effective decision-making. The composition and voting rights are designed to balance the interests of various stakeholders while prioritizing the recovery of debts.