Committee of Creditors (CoC) is the decision-making body constituted during the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, comprising all financial creditors of the corporate debtor, which exercises the central authority over the resolution process including the approval or rejection of resolution plans. Under Indian law, the CoC is constituted under Section 21 of the IBC, 2016.
Legal definition
Section 21(1) of the Insolvency and Bankruptcy Code, 2016 provides:
The interim resolution professional shall after collation of all claims received against the corporate debtor and determination of the financial position of the corporate debtor, constitute a committee of creditors.
Section 21(2) specifies the composition:
The committee of creditors shall comprise all financial creditors of the corporate debtor:
Provided that a financial creditor or the authorised representative of the financial creditor referred to in sub-section (6) or sub-section (6A) or sub-section (5) shall not have a right to participate or vote in a meeting of the committee of creditors, if the party has been convicted by any court for an offence connected with or related to the corporate debtor.
Voting rights within the CoC are proportionate to the financial debt owed to each creditor (Section 21(7)). Decisions of the CoC require a vote of not less than 66% of the voting share for approval of a resolution plan (Section 30(4)) and certain other specified matters, while routine decisions require a 51% majority.
How courts have interpreted this term
Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2020) 8 SCC 531
The Supreme Court held that the CoC exercises "commercial wisdom" in deciding whether to approve or reject a resolution plan, and that neither the NCLT nor the NCLAT can interfere with this commercial judgment. The Court established that the CoC's decision on the distribution of amounts among different creditor classes is binding, subject to compliance with Section 30(2) requirements. The decision affirmed the CoC as the primary decision-maker in the CIRP.
K. Sashidhar v. Indian Overseas Bank (2019) 12 SCC 150
The Supreme Court held that the decision of the CoC to approve or reject a resolution plan is non-justiciable on the grounds of commercial wisdom. The NCLT and NCLAT can examine only whether the procedural requirements of the Code have been met, not whether the CoC's commercial assessment was reasonable or prudent.
Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17
The Supreme Court upheld the exclusion of operational creditors from the CoC, holding that financial creditors and operational creditors form distinct classes with different types of claims. The Court observed that financial creditors are better equipped to assess viability as they are in the business of evaluating financial risk, and their exclusion from CoC membership does not violate Article 14.
Why this matters
The Committee of Creditors is the fulcrum of the Indian insolvency resolution framework. All critical decisions during the CIRP — whether to continue the business as a going concern, whether to approve a resolution plan, whether to replace the resolution professional, and whether to proceed to liquidation — vest in the CoC. The Supreme Court's consistent emphasis on the "commercial wisdom" doctrine means that the CoC's decisions are afforded extraordinary deference by courts.
For practitioners, the practical implications are significant. Financial creditors must actively participate in CoC meetings, as their vote directly determines the corporate debtor's fate. The 66% voting threshold for resolution plan approval means that a small group of dissenting financial creditors can block a plan, requiring the resolution professional to negotiate consensus. Operational creditors, while not members of the CoC, have the right to attend meetings and receive at least the liquidation value of their claims under any approved resolution plan (Section 30(2)(b)).
A key area of evolving jurisprudence is the CoC's obligation to consider the interests of all stakeholders, not merely the financial creditors. The Supreme Court in Essar Steel held that the CoC must take into account maximising asset value and balancing the interests of all stakeholders, including operational creditors, while making distribution decisions under the resolution plan.
Related terms
Broader process:
Key members:
Key participants:
Frequently asked questions
Are operational creditors part of the Committee of Creditors?
No. Under Section 21(2), the CoC comprises only financial creditors. However, operational creditors whose individual debt is at least 10% of the total debt are entitled to attend CoC meetings, but without voting rights (Section 24(4)). The Supreme Court in Swiss Ribbons upheld this differential treatment.
What is the voting threshold for approving a resolution plan?
A resolution plan requires approval by 66% of the voting share of financial creditors in the CoC (Section 30(4)). Other routine decisions require a simple majority of 51% of the voting share. The replacement of the resolution professional requires 66% (Section 27(2)).
Can the CoC's decision be challenged in court?
The Supreme Court has consistently held that the CoC's commercial wisdom in approving or rejecting a resolution plan is not justiciable. Courts can only examine whether the CoC followed the statutory procedure and whether the resolution plan complies with Section 30(2) requirements. The CoC's assessment of commercial viability and feasibility is not open to judicial review.
How is voting share calculated in the CoC?
Voting share is proportionate to the financial debt owed to each creditor relative to the total admitted financial debt. For example, if a creditor is owed Rs. 200 crore out of total financial debt of Rs. 1,000 crore, their voting share is 20%. For classes of creditors such as homebuyers or debenture holders, an authorised representative is appointed to vote on their behalf.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.