CoC Member Can Vote on Resolution Plan Despite Related Party's Stake In Resolution Applicant Consortium
Kirit Singhania
13 Jan 2026 3:32 PM IST
The National Company Law Tribunal (NCLT) at Mumbai has clarified that a member of the Committee of Creditors (CoC) is not barred from voting on a resolution plan merely because its related persons have an interest in the consortium of a resolution applicant.
It said insolvency law does not prescribe any such disqualification on the ground of conflict of interest.
A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar dismissed an application filed by the suspended promoters of Hotel Horizon Pvt Ltd challenging the approval of a resolution plan during its corporate insolvency resolution process.
“Further, a CoC member, being interested in a resolution plan filed by one of Resolution Applicant due to their or their related persons' participation in the consortium of such Resolution Applicant, is not barred from exercising its vote on such resolution plan on account of their conflict of interest.”, the tribunal observed.
Hotel Horizon was admitted into CIRP on November 19, 2024 on a petition filed by Asset Care & Reconstruction Ltd. The promoters sought rejection of a resolution plan dated July 10, 2025 submitted by a consortium comprising Oberoi Realty Ltd, Naman Developers Pvt Ltd, and JM Financial Properties and Holdings Ltd. The promoters alleged conflict of interest, undervaluation and procedural irregularities.
The resolution plan was approved by the CoC with a 100 percent voting share on July 14, 2025 after completion of the challenge mechanism. The applicants contended that one of the consortium members was related to a CoC member, thereby vitiating the entire process.
Rejecting the plea, the tribunal noted that the CoC consisted of two financial creditors holding the entire voting share and that the Code and CIRP Regulations do not prohibit a financial creditor from proposing or supporting a resolution plan directly or indirectly through a related entity.
It also noted that multiple resolution applicants had participated in the process and none, except one unsuccessful bidder, had raised objections regarding conflict of interest.
The tribunal concluded that mere commercial linkage does not render the approval process illegal and dismissed the application.
Case Title: Sagar Sharma & Anr. vs Committee of Creditors & Anr.
Case Citation: 2026 LLBiz NCLT (MUM) 45
Case Number: I.A. NO. 4764 OF 2025 IN C.P. NO. (IB) 1241 (MB) OF 2022
For Applicant: Advocates Akshay Petkar, Akash Agarwal
For Resolution Professional: Advocates Rishabh Jaisani, Kriti Kalyani, Ansh Kumar
For Respondent: Advocates Rohit Gupta, Manaswi Agarwal