Committee of Creditors not required to share resolution plans with suspended Board under IBBI Regulations 19 and 21

The NCLAT held that the Committee of Creditors is not required to provide resolution plans to the suspended Board of Directors for their comments under Regulations 19 and 21 of the IBBI Regulations, 2016. While the Board must be taken into confidence for debt contract modifications through negotiations, they cannot decide the viability and feasibility of resolution plans or restructure debt. Only the Committee of Creditors, being experts in the field, can determine the viability and financial matrix of resolution plans through majority voting. The appeal was disposed of without granting the relief sought.

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Issues:
1. Grievance regarding Committee of Creditors not providing copies of resolution plans to the Board of Directors for comments.
2. Whether resolution plans should be disclosed to Board of Directors, Operational Creditors, or other resolution applicants attending the meeting.

Analysis:
1. The appeal raised concerns about the Committee of Creditors not providing the Board of Directors with copies of resolution plans for their comments, citing Regulations 19 and 21 of the Insolvency & Bankruptcy Board of India Regulations, 2016. The appellant argued that as per Section 31 of the I & B Code, approved resolution plans are binding on stakeholders, necessitating the Committee to share the plans with the Board of Directors.

2. The respondent contended that resolution plans are confidential documents and should not be disclosed to the Board of Directors, Operational Creditors, or other resolution applicants. The Tribunal examined Section 24 of the I & B Code, which mandates the resolution professional to notify the Board of Directors of Committee of Creditors meetings. The Tribunal referred to previous judgments emphasizing the role of the Board of Directors in negotiations and decision-making processes.

3. The Tribunal highlighted that while the Board of Directors can attend meetings where resolution plans are discussed, the confidential nature of these plans restricts their distribution to non-voting participants like the Board of Directors, Operational Creditors, and resolution applicants. The Tribunal reiterated that resolution plans are confidential and should not be shared with competitors or other stakeholders attending the meeting.

4. The Regulations governing notice for Committee meetings require the resolution professional to provide relevant documents for discussion and voting. The Tribunal clarified that while matters like resolution plans should be discussed, sharing them with non-voting participants is not required. The Board of Directors' involvement is crucial in negotiations but does not extend to decision-making on the viability or restructuring of debt.

5. Ultimately, the Tribunal declined to grant the relief sought by the appellant, emphasizing the expertise of the Committee of Creditors in assessing resolution plans and making decisions. The decision was made in line with the confidentiality of resolution plans and the specific roles assigned to different stakeholders in the insolvency resolution process.

This detailed analysis of the judgment addresses the issues raised in the appeal and provides a comprehensive understanding of the Tribunal's decision regarding the disclosure of resolution plans to various stakeholders involved in the insolvency resolution process.

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