Tribunal holds that mere allegations of proxy claims and assured returns do not suffice to exclude members from Committee of Creditors; upheld Resolution Professional's verification process and CoC voting validity.
In a significant ruling delivered on October 5, 2026, the National Company Law Tribunal (NCLT), New Delhi Bench, dismissed the application filed by a group of allottees challenging the constitution and voting process of the Committee of Creditors (CoC) in the Corporate Insolvency Resolution Process (CIRP) of Spaze Towers Private Limited. The application sought exclusion of certain members alleged to be "proxy claimants" connected with the suspended management, and aimed to annul voting decisions in the third CoC meeting held on January 9, 2025.
The case arose amidst allegations that some allottees who received assured returns without paying the full sale consideration were benamidars or proxies of the suspended directors seeking to influence the CIRP process. The applicants contended that these proxy claimants had distorted the CoC voting strength and that crucial financial data was withheld by the erstwhile Resolution Professional (RP), Mr. Gaurav Katiyar.
However, the NCLT, comprising Mr. Mahendra Khandelwal (Judicial Member) and Mr. Atul Chaturvedi (Technical Member), upheld the earlier verification and admission of claims by the RP under the Insolvency and Bankruptcy Code, 2016 (IBC). The tribunal emphasized that mere allegations without conclusive evidence cannot justify exclusion of creditors from the CoC. It noted that the RP's role in claim verification is administrative, not adjudicatory, and disputed issues such as fraud or benami ownership require separate investigation.
The bench referred to authoritative precedents including the NCLAT's decision in Rita Malhotra v. Orris Infrastructure Pvt. Ltd. and the Supreme Court's judgment in Mansi Brar Fernandes v. Shubha Sharma, confirming that allottees with assured-return MOUs retain their status as financial creditors and members of the CoC. It clarified that the presence of assured-return clauses does not disqualify an allottee from inclusion.
Regarding allegations of siphoning of funds and fraudulent transactions, the tribunal observed that such matters are subject to other ongoing investigations, and cannot be grounds to retrospectively invalidate verified claims or CoC decisions. It also dismissed the contention that incomplete historical accounting data automatically rendered admitted claims fabricated.
The tribunal further held that challenges to the appointment of the RP, Mr. Narender Sharma, based on the CoC voting are impermissible as the appointment had attained finality and was beyond the scope of collateral attack through the present application. It underscored that replacement and appointment of RPs are governed by the CoC's commercial decisions, requiring a 66% majority vote, and the Adjudicating Authority does not interfere without proven statutory violations.
Consequently, the application seeking reconstitution of the CoC, exclusion of alleged proxy claimants, provision of detailed account statements, and annulment of voting results was dismissed for lack of merit. The tribunal also refrained from ordering any forensic audit solely based on suspicion, noting that any wrongful transactions can be addressed under relevant legal provisions at the appropriate stage.
This judgment reinforces the sanctity of the RP's role in claim verification and the finality of the CoC's commercial decisions, while delineating the limits of judicial intervention in CIRP processes absent concrete proof of irregularity.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Committee of Creditors - Mere allegation that certain allottees are proxies, benamidars or persons connected with suspended management is not sufficient to exclude them from CoC - Assured-return allottees continue to fall within ambit of "allottee"/financial creditor - Claims already verified and admitted by Resolution Professional cannot be excluded and CoC voting cannot be annulled merely on unsubstantiated allegations of fraud, siphoning or proxy arrangement.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 5(8)(f) Explanation (i), 7, 18, 21, 25(2)(e) & (h), 27, 60(5); National Company Law Tribunal Rules, 2016 Rule 11; Companies Act, 2013 Section 206(5), 208
Vivek Khanna v. Mr. Gaurav Katiyar, (NCLT)(New Delhi) : Law Finder Doc Id # 3001093
