Summary: The article addresses a critical unanswered question in Indian insolvency law: whether the Committee of Creditors (CoC) becomes functus officio after NCLT approval of a resolution plan under Section 31 of the IBC, a question with significant academic and practical implications. Through harmonious interpretation of existing provisions, the authors argue that the CoC remains in existence until the Supreme Court finally decides on any questions pertaining to the resolution plan, as the corporate insolvency resolution process continues through the appellate hierarchy. However, while inferential support exists for this position, urgent legislative intervention is needed to provide an explicit statutory framework defining the CoC’s post-approval powers and to eliminate the current legal uncertainty.
INTRODUCTION
The Insolvency and Bankruptcy Code, 2016 (“IBC”), widely regarded as one of India’s most transformative economic legislations, introduced a creditor-driven resolution framework prioritising value maximisation and time-bound resolution. Within this framework, the committee of creditors (“CoC”) plays a pivotal role, akin to that of a protagonist, which takes key decisions in its commercial wisdom for resolution of the corporate debtor.
Yet, a fundamental question remains unanswered in both statute and jurisprudence: whether the CoC becomes functus officio once the National Company Law Tribunal (“NCLT”) approves a resolution plan under Section 31 of the IBC. This question not only gains academic significance but also has practical implications, especially when resolution plans face implementation delays, unforeseen complications, or undue litigation pendency.
While there exists a critical lacuna in the IBC that demands legislative attention, the legislative intent that the CoC remains in existence exercising statutory functions much beyond approval becomes evident when existing provisions are read collectively and interpreted harmoniously.
THE STATUTORY FRAMEWORK: UNDERSTANDING THE COC’S LIFESPAN UNDER THE IBC SCHEME
Constitution and Functioning of the CoC
The CoC comes into existence once the interim resolution professional collates all claims received against the corporate debtor and constitutes the CoC under Section 21 of the IBC.
Thereafter, as stipulated under Section 23, the resolution professional conducts the corporate insolvency resolution process (“CIRP”) and continues to manage the operations of the corporate debtor after the expiry of the CIRP period, until an order approving the resolution plan under Section 31(1) or appointing a liquidator under Section 34 is passed by the NCLT.
Similarly, Explanation to Regulation 18 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016(“CIRP Regulations”), clarifies that meetings may be convened till the resolution plan is approved under Section 31(1) or an order for liquidation is passed under Section 33, and decide on matters that do not affect the resolution plan submitted before the NCLT.
The Extended Timeline: Beyond NCLT Approval
Section 28 restricts the resolution professional from undertaking certain actions without CoC approval “during the insolvency resolution process.” The term “insolvency resolution process”, defined in Regulation 2(e) of the CIRP Regulations, refers to the insolvency resolution process under Chapter II of Part II of the Code.
An appeal under Section 32 before the National Company Law Appellate Tribunal (“NCLAT”) against an order approving the resolution plan under Section 31, which is a continuation of the original proceeding, is a part of Chapter II of the Part II of the IBC. By natural extension, an appeal against the NCLAT’s order would be a continuation of the same proceedings. Therefore, it can be plausibly argued that the “corporate insolvency resolution process” would continue till the Supreme Court finally decides an appeal under Section 62.
Furthermore, despite the approval of the resolution plan under Section 31 of the IBC, in the hierarchy of appeals, the Supreme Court, while adjudicating an appeal under Section 62, may hold that the successful resolution applicant has not complied with the resolution plan and pass an order of liquidation under Section 33.
Thus, a conjoint reading of the relevant provisions, an inference can be drawn that the scheme of the IBC and CIRP Regulations clarifies that the CoC is deemed to be in existence till the Supreme Court makes a final decision in an appeal under Section 62.
Role of the CoC in Monitoring the Implementation of the Resolution Plan
The aforesaid interpretation is strengthened by a perusal of the mandatory contents of a resolution plan listed under Regulation 38 of the CIRP Regulations, which provides that the CoC shall consider establishing a monitoring committee for monitoring and supervising the implementation of the resolution plan. The committee may comprise a resolution professional, CoC representatives, and representatives of the resolution applicant. Thus, the Regulation clarifies that the CoC, either itself or through a monitoring committee, continues to monitor the implementation of the plan until the Supreme Court finally concludes the matter in an appeal under Section 62. If the legislative intent was for the CoC to lose its mandate post approval, the Regulations could have never envisaged mandatory participation of the CoC right until implementation.
The IBC and its regulations that permit the CoC to act through a “monitoring committee” clearly show that this committee is only a delegate of the CoC, with its composition solely based on the CoC’s discretion.
While there is no clear judicial guidance on the CoC’s role post approval, the NCLAT in Bank of Maharashtra v. Videocon Industries,[i]on the question of whether a resolution plan can be remanded back to the CoC, has categorically held that the CoC does not become functus officio upon the approval of the resolution plan, thus, resolution plans can be remanded back to CoC for reconsideration.
Taking cue from the above, in a scenario where a resolution plan receives NCLT approval under Section 31, but during appellate proceedings, the Supreme Court orders liquidation under Section 33 on finding that the successful resolution applicant has failed to comply with the plan’s terms, who else but the CoC, armed with commercial wisdom, is best positioned to guide these critical decisions?
Thus, a combined reading of the IBC and CIRP Regulations reveals the legislative intent for the CoC to continue monitoring the plan implementation till the Supreme Court concludes the matter in an appeal under Section 62. It would be antithetical to accept that the same lenders, who form part of the CoC and take decisions in their commercial wisdom, do not have the locus to take necessary steps towards the successful implementation of the resolution plan post approval.
ADDRESSING THE LEGISLATIVE LACUNA
While the scheme of IBC, read harmoniously with the CIRP Regulations, provides inferential support for the CoC’s continued existence, there is no specific provision that explicitly provides for the extended mandate of the CoC beyond the approval of the resolution plan. The current position represents judicial innovation rather than legislative intent. The absence of clear statutory guidance addressing the CoC’s post-approval role, especially for monitoring the implementation of the resolution plan, presents a critical gap that undermines legal certainty and demands urgent legislative intervention. This lacuna creates several problems, such as legal uncertainty for all stakeholders, practical difficulties in implementation monitoring, and potential disputes over CoC authority during pendency of appeals.
Significantly, the Insolvency and Bankruptcy (Amendment) Bill, 2025,[ii] seeks to amend Section 35 of the IBC to provide for a creditor-driven liquidation process instead of the existing stakeholders’ consultation committee. The accompanying Statement of Objects and Reasons clarifies the legislative intent to extend the role of the CoC constituted during the CIRP to the liquidation process.
Nonetheless, the legislation continues to overlook the lacuna concerning the CoC’s supervisory mandate during the period post-approval of the resolution plan by the NCLT.
Presently, there is a need for amendment to the IBC and the CIRP Regulations, to provide for a clear statutory framework defining the CoC’s scope of powers post approval of the resolution plan, during the implementation phases and appellate proceedings under the IBC.
CONCLUSION
An inference drawn from the scheme of the IBC and CIRP Regulations suggests that the CoC is deemed to be in existence till the Supreme Court takes the final decision in an appeal under Section 62. This interpretation aligns with the fundamental objectives of value maximisation and creditor protection enumerated under the IBC.
The principle that the CoC does not become functus officio upon NCLT approval of a resolution plan represents a crucial safeguard in the insolvency resolution framework. It ensures that (a) the creditor interests remain protected throughout the implementation phase and appellate proceedings and (b) the CoC is empowered to exercise commercial wisdom in addressing implementation delays or complications that may arise during appellate proceedings and provides a mechanism for addressing unforeseen circumstances.
However, this oversight by the CoC must be grounded in clear statutory authority rather than an inferential interpretation of the IBC. Addressing this lacuna would be a fundamental step towards strengthening India’s position as a jurisdiction where creditor rights are protected, commercial wisdom prevails, and economic recovery is effectively facilitated.
[i] Company Appeal (AT) (Ins.) No. 503 of 2021.
[ii] Introduced in Lok Sabha on August 12, 2025.