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CS Professional · Corporate Restructuring, Valuation and Insolvency · Convening and Conduct of Meetings of Committee of Creditors

At a CoC meeting of Deccan Pharma Ltd, a representative of operational creditors, who was duly given notice, does not attend. A financial creditor argues that the proceedings are invalid. What is the legal position?

The proceedings remain valid. Under the proviso to section 24(4), the absence of a director, partner or operational creditors' representative who may attend does not invalidate the CoC meeting, since they have no voting right and their presence is not required.

  1. AThe meeting is invalid unless the representative is present
  2. BThe meeting is valid only if the Adjudicating Authority ratifies it
  3. CThe proceedings are not invalidated by the absence of the representativeCorrect
  4. DThe meeting is valid only if the suspended directors also stay absent

Explanation

The proviso to section 24(4) says the absence of any such director, partner or operational creditor representative does not invalidate the proceedings. They may attend but have no vote. The first option wrongly treats attendance as mandatory.

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