RP Cannot Refuse Creditor Substitution Merely Because CoC Has Approved Resolution Plan: NCLT Kolkata
Kirit Singhania
30 Jan 2026 2:05 PM IST
The National Company Law Tribunal at Kolkata has held that a resolution professional cannot refuse substitution of a financial creditor merely because the corporate insolvency resolution process has progressed substantially or because a resolution plan has been approved by the Committee of Creditors (CoC) but is yet to receive approval of the adjudicating authority.
A coram of Judicial Member Bidisha Banerjee and Technical Member Siddharth Mishra observed that under the insolvency law, a valid assignee of financial debt steps into the shoes of the assignor and acquires all statutory rights including participation and voting in the CoC.
“In view thereof, the Resolution Professional cannot refuse substitution of a Financial Creditor on the ground that the CIRP has progressed substantially or that the resolution plan has been approved by the CoC but not by the Adjudicating Authority,” the tribunal observed.
The dispute arose in the ongoing CIRP of Bengal Emta Coal Mines Ltd., which was initiated on a petition filed by an operational creditor in December 2018. The petition was admitted in June 2022.
During the pendency of the CIRP, Suraksha Asset Reconstruction, which held a majority voting share of 60.25 per cent in the CoC, assigned its entire financial debt along with all associated rights and interests to Authum Investment through an assignment agreement executed on 30 March 2024.
Authum subsequently informed the resolution professional of the assignment by a letter dated 30 May 2024 and sought substitution in the CoC, along with access to CIRP-related records.
While the resolution professional initially sought a confidentiality undertaking and shared certain CoC documents, he later declined to reconstitute the CoC, citing the advanced stage of the CIRP and the fact that a resolution plan had already been approved by the lenders and was pending before the tribunal.
Rejecting this stand, the tribunal held that the insolvency process continues until a resolution plan is approved under the Code and that mere approval by the CoC does not bring the process to an end. It noted that the Committee of Creditors remains in existence during this period and the rights of financial creditors subsist.
While allowing the application, the tribunal directed the substitution of Authum Investment as a financial creditor in the CoC.
For Applicant: Advocates Turab Ali Kazmi, Utkarsh Singh, Tanay Dubey, Hardika Kukreja, Niharika Berry, Shantanu Pandey
For Resolution Professional: Advocates Kumarjit Banerjee, Sanchari Chakraborty, Adil Naushad