Corporate Restructuring, Valuation and Insolvency · Resolution Strategies

Committee of Creditors and Resolution Plan Approval under IBC

Updated 11 October 2026 · Fact-checked

The committee of creditors (CoC) is the body of financial creditors that decides the fate of a corporate debtor in CIRP. The resolution professional prepares the information memorandum, invites plans and presents compliant ones. The CoC approves a plan by not less than 66% of voting share, after weighing feasibility, viability and distribution.

Understand Committee of Creditors and Resolution Plan Approval

When a company enters the corporate insolvency resolution process (CIRP), control passes from the board to a resolution professional (RP). The big commercial decisions, however, are not left to the RP. They belong to the committee of creditors (CoC), which is made up of the financial creditors. Operational creditors do not vote as such.

The RP's job is to run the process fairly. Under section 25, the RP preserves and protects the assets and keeps the business running, maintains an updated list of claims, convenes and attends all CoC meetings, and prepares the information memorandum in line with section 29. The memorandum gives bidders the relevant information about the debtor so that they can prepare a plan.

Next, the RP invites prospective resolution applicants to submit plans. Under section 25(2)(h), the RP invites those who meet criteria laid down by the RP with the approval of the CoC. The criteria must have regard to the complexity and scale of the debtor's business and any other conditions the Board specifies. Each applicant submits a plan, with an affidavit that it is eligible under section 29A, prepared on the basis of the information memorandum (section 30(1)).

The RP then screens every plan under section 30(2). A plan must provide for insolvency resolution process costs in priority, pay operational creditors at least the higher of the two floors in clause (b), pay dissenting financial creditors at least their liquidation entitlement, and provide for management of the debtor's affairs and for implementation and supervision of the plan. It must not contravene any law in force and must meet other requirements specified by the Board. Only plans that pass this check go to the CoC (section 30(3)).

The CoC may approve a plan by a vote of not less than 66% of the voting share of the financial creditors. It considers feasibility and viability, the manner of distribution proposed (which may take into account the order of priority in section 53(1), including the priority and value of a secured creditor's security interest), and other requirements specified by the Board. The RP submits the approved plan to the Adjudicating Authority (section 30(6)). The applicant may attend the CoC meeting where its plan is considered but cannot vote unless it is also a financial creditor (section 30(5)).

Key rules to remember

CoC approval threshold: Approval needs votes ≥ 66% of the voting share of the financial creditors; Section 30(4). The threshold is on total voting share, not only on the creditors present and voting. The CoC must also consider feasibility, viability and the manner of distribution.
Operational creditor floor: Payment to operational creditors ≥ higher of (liquidation value under section 53) and (amount under the plan's own distribution run through the section 53(1) priority order); Section 30(2)(b). The RP checks this before presenting the plan to the CoC.
Dissenting financial creditor floor: Payment to a financial creditor who does not vote in favour ≥ amount payable under section 53(1) in liquidation; Section 30(2)(b). Distribution must be fair and equitable.
Plan must pay costs first: Insolvency resolution process costs paid in priority to other debts; Section 30(2)(a), in the manner specified by the Board.
Resolution applicant at CoC meeting: May attend; no vote unless also a financial creditor; Section 30(5).
Deemed shareholder approval: Any shareholder approval needed under the Companies Act, 2013 or other law for implementing the plan is deemed given; Explanation to section 30(2). It prevents the plan from contravening that law on this ground.
Pre-pack approval vote: Base plan or selected plan approved by CoC with votes ≥ 66% of voting shares; Section 54K(13). The base plan route applies only if it does not impair operational creditors' claims (54K(4)).

How to solve Committee of Creditors and Resolution Plan Approval questions

Use this sequence for any question on the CoC and plan approval. It follows the order in which the law works, so you cover provision, facts and conclusion.

1Identify the stage: information memorandum, invitation of plans, RP's compliance check, CoC voting, or submission to the Adjudicating Authority.
2Name the actor and the duty. The RP prepares the memorandum, invites applicants, maintains the claims list and presents plans (section 25). The CoC evaluates and approves.
3State the provision: section 25 for RP duties, section 29 for the information memorandum, section 30(2) for the checks on plans, and section 30(4) for the vote.
4Test the plan against the section 30(2) conditions one by one: costs, operational creditors, dissenting financial creditors, management, implementation, legality.
5Apply the vote: compute the voting share in favour as a percentage of total voting share of financial creditors and compare it with 66%.
6Check who is voting. Only financial creditors vote, and a resolution applicant votes only if it is also a financial creditor.
7Conclude clearly: plan approved or not, what the RP does next (submit to the Adjudicating Authority under section 30(6)), and any drafting or compliance point.
8 If a pre-pack is mentioned, switch to section 54K: base plan, impairment of operational creditors' claims, and competing plans.

Quickest way: Four-line CoC approval check

When to use it: Use when a case gives voting percentages and plan terms and asks whether the plan can be approved.

Line 1: Did the RP confirm that the plan meets section 30(2)? If not, it cannot go to the CoC.
Line 2: Add up the voting share in favour. Is it at least 66% of total voting share?
Line 3: Are the operational creditor and dissenting financial creditor floors met?
Line 4: Conclude, and state that the RP submits the approved plan to the Adjudicating Authority.

Common mistakes in Committee of Creditors and Resolution Plan Approval

Saying the CoC includes operational creditors with voting rights.
Students mix up the claims list, which includes all creditors, with the CoC, which is made up of financial creditors.
Fix: Write that approval is by a vote of the voting share of the financial creditors, as in section 30(4).
Quoting 75% as the approval threshold.
The original Code had seventy-five per cent. Older notes still carry it.
Fix: The current text says sixty-six. Use 66% and mention it is of voting share.
Computing 66% only on creditors present at the meeting.
Students treat it like an ordinary resolution on votes cast.
Fix: Work out the percentage against the total voting share of the financial creditors.
Letting the CoC consider plans before the RP's compliance check.
Students forget that screening is the RP's job.
Fix: State that the RP examines each plan under section 30(2) and presents only conforming plans (section 30(3)).
Giving the resolution applicant a vote at the meeting.
The applicant attends the meeting, so students assume it votes.
Fix: Cite section 30(5): the applicant may attend but has no vote unless it is also a financial creditor.
Applying pre-pack rules to a regular CIRP or the reverse.
Section 54K has similar wording to section 30.
Fix: Check for the words base resolution plan, impairment and pre-packaged insolvency commencement date before citing section 54K.

Worked examples

Example 1

In the CIRP of Ganga Steels Ltd, the CoC has financial creditors with voting shares: Bank A 40%, Bank B 25%, NBFC C 20%, Fund D 15%. A and C vote for a resolution plan that the RP has found to conform to section 30(2). B and D vote against. Can the CoC approve the plan?

Show the solution

Provision: section 30(4) requires a vote of not less than 66% of the voting share of the financial creditors.
Votes in favour: A 40% + C 20% = 60%.
Compare: 60% is less than 66%.
The plan has passed the RP's check, but the vote requirement is not met.

Answer: The plan cannot be approved. It has 60% of the voting share against the required 66%. The RP cannot submit it to the Adjudicating Authority as an approved plan.

Example 2

Explain the duties of the resolution professional in inviting and presenting resolution plans, and the checks he must run before a plan goes to the CoC.

Show the solution

Information memorandum: under section 25(2)(g), the RP prepares it in accordance with section 29. It gives applicants the information needed to prepare a plan.
Invitation: under section 25(2)(h), the RP invites prospective resolution applicants who fulfil criteria laid down by him with CoC approval, having regard to the complexity and scale of the debtor's business and other conditions specified by the Board.
Submission: applicants submit plans with an affidavit of eligibility under section 29A (section 30(1)).
Compliance check under section 30(2): costs are paid in priority; operational creditors get at least the higher of the two amounts in clause (b); dissenting financial creditors get at least their liquidation entitlement; the plan provides for management, implementation and supervision; it does not contravene any law; it meets other Board requirements.
Presentation: under section 25(2)(i) and section 30(3), the RP presents conforming plans at CoC meetings. After approval by not less than 66% of the voting share, he submits the plan to the Adjudicating Authority (section 30(6)).

Answer: The RP prepares the information memorandum, invites eligible applicants on criteria approved by the CoC, screens each plan against section 30(2), presents only conforming plans to the CoC, and files the approved plan with the Adjudicating Authority.

Exam tips

Write the section number next to each rule: 25 for RP duties, 29 for the information memorandum, 30(2) for plan conditions, 30(4) for the 66% vote.
In case questions, show the arithmetic of the voting share before concluding.
Use the structure provision, application to facts, conclusion. Add one drafting or compliance point, such as recording the CoC resolution in the minutes.
If a question mentions a pre-pack, cite section 54K and mention the base resolution plan and the two-day submission timeline.
Keep the role split clear: the RP screens and presents, the CoC decides, the Adjudicating Authority approves.

Practice questions from Resolution Strategies

Committee of Creditors and Resolution Plan Approval in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA FinalCommittee of Creditors and Resolution Plan

Committee of Creditors and Resolution Plan Approval: frequently asked questions

What vote does the CoC need to approve a resolution plan?

Not less than 66% of the voting share of the financial creditors, under section 30(4). The CoC must consider feasibility, viability and the manner of distribution before voting.

Who prepares the information memorandum?

The resolution professional prepares it under section 25(2)(g), in accordance with section 29. Applicants use it to prepare their resolution plans.

Can a resolution applicant vote in the CoC meeting?

It may attend the meeting where its plan is considered, but it cannot vote unless it is also a financial creditor (section 30(5)).

What happens after the CoC approves the plan?

The resolution professional submits the approved plan to the Adjudicating Authority under section 30(6). In a pre-pack, section 54K(15) gives the same direction.

How is approval different in a pre-packaged process?

The corporate debtor submits a base resolution plan within two days of the pre-packaged insolvency commencement date. The CoC can approve it only if it does not impair operational creditors' claims. Otherwise the RP invites competing plans (section 54K).