Committee of Creditors limited right to litigate in Code matters; Resolution Professional not the exclusive representative.

The article addresses whether a Committee of Creditors (CoC) may sue or be sued under the Insolvency and Bankruptcy Code, concluding that the CoC lacks full juristic personality but is accorded a limited, functional right to litigate in Code-related matters subject to safeguards (e.g., single-member CoC, unanimous multi-member CoC, and requirement to array individual members when a multi-member CoC is respondent). It further concludes the Resolution Professional is not the exclusive litigious representative of the CoC and that the CoC need not be impleaded in proceedings challenging the status of an individual financial creditor.

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Issues: (i) Whether the appeal is properly instituted; (ii) Whether the Committee of Creditors (CoC) has a legal character/juristic personality to litigate in its name under the Insolvency and Bankruptcy Code; (iii) If CoC has the right to litigate, whether only the Resolution Professional must represent it; (iv) Whether the CoC must be impleaded in a proceeding seeking removal of a particular financial creditor from the CoC.

Issue (i): Whether the appeal is properly instituted.

Analysis: The verification and power of attorney objections were raised but, given the Tribunal's decision on impleading and substantive issues, detailed examination of the verification objection was not required; the scope of the power granted prima facie appeared broad.

Conclusion: The maintainability objection is rendered largely superfluous by other conclusions and is not decided as a determinative bar to the appeal.

Issue (ii): Whether the CoC has a legal character/juristic personality to litigate in its name under the Code.

Analysis: The CoC is not a corporate entity with perpetual succession, common seal, or independent corporate personality; it is a statutory collective of independent financial creditors formed under the Code. Jurisprudential categories such as company, partnership, trust or society do not neatly fit the CoC. However, practical functioning under the Code has evolved to permit the CoC to appear in litigation and the statutory role of the CoC in the insolvency process supports limited recognition of its litigative capacity within the Code's framework. The analysis distinguishes between full juristic personality and a functional, limited authorization to litigate in matters arising under the Code.

Conclusion: The CoC does not possess full juristic personality in the classical sense but, for the purposes of issues arising under the Insolvency and Bankruptcy Code, it is permitted a limited right to litigate in its name subject to the safeguards and conditions set out by the Tribunal.

Issue (iii): Whether, if CoC can litigate, only the Resolution Professional may represent it.

Analysis: The Code assigns distinct roles to the CoC and the Resolution Professional; statutory provisions that require the RP to perform certain functions do not render the RP the exclusive representative of the CoC in all proceedings. The functional role of the RP in filing applications under specific Code provisions does not convert the RP into the sole litigious representative of the CoC.

Conclusion: The scheme of the Code does not mandate that only the Resolution Professional represent the CoC; the CoC may be represented or may litigate subject to the conditions identified by the Tribunal.

Issue (iv): Whether the CoC needs to be impleaded in proceedings seeking removal of a particular financial creditor from the CoC.

Analysis: A proceeding challenging the entitlement of a specific financial creditor relates to the individual contractual and factual rights of that creditor. The CoC is a collective of independent creditors whose membership rights derive from individual contracts with the corporate debtor. A removal challenge to one member does not necessarily affect the identical or collective rights of all members, and inclusion of the CoC as a party is not necessary or proper where the dispute concerns only the status of a particular creditor.

Conclusion: The CoC is neither a necessary nor a proper party to proceedings directed solely at the removal of a particular financial creditor; impleading the CoC in such proceedings is not required.

Final Conclusion: The appeal lacks merit and is dismissed; the impugned order of the Adjudicating Authority refusing impleading of the CoC in the specific removal application is affirmed.

Ratio Decidendi: For purposes of the Insolvency and Bankruptcy Code, a Committee of Creditors, though not a classical juristic person, is accorded a limited right to litigate in its name in matters arising under the Code subject to conditions (single-member CoC, unanimous multi-member CoC, and the requirement to array individual members when a multi-member CoC is made a respondent), and the Resolution Professional is not the exclusive representative of the CoC for all litigative purposes.

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