Committee of Creditors cannot be reconstituted by the Resolution Professional; original creditors may consider withdrawal under insolvency rules.

The Resolution Professional's role is confined to collation, verification, admission or rejection of claims, and updating the creditor list under the insolvency regulations; it cannot be used to reconstitute a duly formed Committee of Creditors or alter creditor status through an adjudicatory exercise. Once the Committee of Creditors is constituted, any change must occur within the insolvency framework. On the facts noted, the Adjudicating Authority's directions requiring the originally constituted Committee of Creditors to consider the proposed withdrawal application under section 12A were held legally sound, and the challenge failed.

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Issues: Whether the Resolution Professional or the Adjudicating Authority could require a fresh or altered Committee of Creditors to be convened on the basis of subsequent claim status, and whether the directions issued for convening the meeting of the originally constituted Committee of Creditors for consideration of withdrawal under section 12A were valid.

Analysis: The appeal turned on the settled position that the Resolution Professional's role is limited to collation, verification, admission or rejection of claims and updating the list of creditors as permitted by the regulations. Once the Committee of Creditors is constituted on that basis, the Resolution Professional cannot change its character by reconstituting it afresh or by altering the status of creditors through an adjudicatory exercise. The record also showed that the insolvency process had been restored after a long interval, and the impugned directions were confined to requiring the originally constituted Committee of Creditors to consider the proposed withdrawal application in accordance with the Code and the regulations.

Conclusion: The directions issued by the Adjudicating Authority were held to be legally sound, and the challenge to the same failed.

Ratio Decidendi: The Resolution Professional cannot exercise adjudicatory power to reconstitute or alter a duly formed Committee of Creditors, and creditor status once determined for that purpose cannot be changed except in accordance with the insolvency framework.

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