NCLT Mumbai Denies Authum Investment's Plea to Alter Voting Decision in Insolvency Case

Tribunal rules against retrospective voting changes and upholds CoC's commercial wisdom in distribution of proceeds.

In a significant ruling, the National Company Law Tribunal (NCLT) Mumbai Bench has dismissed the application filed by Authum Investment and Infrastructure Limited challenging the voting outcome and distribution plan approved by the Committee of Creditors (CoC) in the insolvency proceedings of Reliance Broadcast Network Ltd. The tribunal, comprising Member (Judicial) Mohan Prasad Tiwari and Member (Technical) Charanjeet Singh Gulati, delivered the judgment on November 6, 2025.

The case revolved around Authum Investment's attempt to alter its vote after the closure of the voting window, a move it justified by citing an alleged error in its initial dissent to the resolution plan proposed by Sapphire Media Ltd. The CoC had approved the plan with an 88.97% majority, but Authum, holding an 11.03% voting share, initially rejected the plan.

Authum's application sought to be treated on par with other assenting secured creditors in the distribution of proceeds, arguing that its later assent should be considered valid. The company relied on the amended Regulation 26 of the Insolvency and Bankruptcy Code (IBC), contending that changes in votes were permissible until the tribunal's approval of the resolution plan.

However, the tribunal firmly rejected this argument, emphasizing that once the voting portal is blocked at the end of the voting period, no further changes are permissible. Citing sub-regulation (3) of Regulation 26, the tribunal underscored that the closure of the voting window signifies the finality of decisions, thereby rendering any subsequent alterations invalid.

Furthermore, the tribunal addressed the issue of alleged discriminatory treatment in the distribution of proceeds. Authum had claimed unfair treatment as it was allocated only 3% of its admitted claim due to its subservient charge status. The tribunal upheld the CoC's commercial wisdom in determining the distribution mechanism, referencing the Supreme Court's stance in the Essar Steel case, which supports the CoC's authority to create sub-classes of creditors based on security priorities.

The tribunal also dismissed Authum's reliance on unrelated judicial precedents, noting that the cited cases did not pertain to the specific context of insolvency proceedings and voting regulations.

Ultimately, the NCLT's decision reinforces the sanctity of the CoC's commercial decisions and the integrity of the voting process within the stipulated timelines, denying the retrospective application of voting changes.

Bottom Line:

Insolvency and Bankruptcy Code - Change of vote by a dissenting financial creditor after voting window closure is not permissible and lacks legal validity.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 - Regulation 26, Section 30(2), Section 30(4)

Authum Investment and Infrastructure Limited v. HSBC Asset Manangement (India) Pvt. Ltd., (NCLT)(Mumbai Bench) : Law Finder Doc Id # 2805306