Committee Of Creditors (CoC): Decision-Making, Transparency, And Judicial Scrutiny

Written by: Usheeka Gulati, 4^th year B.B.A.LL.B (Hons.), School of Law, Lovely Professional University

Abstract

While the Code positions the CoC as a stabilizing force in financial governance, its functioning has sparked debate over how transparent and fair its decision-making actually is, and where courts should intervene. At the centre of this structure is the Committee of Creditors (CoC), which makes crucial commercial decisions throughout the insolvency process. The CoC exercises ultimate discretion over insolvency outcomes, including whether to approve a resolution plan or proceed with liquidation^[1] when revival prospects appear unfeasible. Although the Code envisions the CoC as a guardian of financial order and stability, the actions of the CoC raise several questions regarding transparency, fairness, and judicial oversight. Judicial forums increasingly face the challenge of determining the extent to which CoC decisions, once insulated as matters of commercial wisdom, should be scrutinized for procedural fairness.. This paper examines the development of the CoC's decision-making powers, the contours of judicial intervention, and the standards of transparency enshrined within the IBC regime. It argues that a judicious balance between preservation of commercial independence and accountability is necessary to uphold the legitimacy and functional efficacy of the insolvency ecosystem in India.

 Keywords: Committee of Creditors, IBC 2016, Commercial Wisdom, Judicial Intervention, Transparency, Creditor Rights, Corporate Insolvency

^[1] Insolvency and Bankruptcy Code, No. 31 of 2016, § 30(4), § 33(2) (India).

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