2026 (3) TMI 95 - AT - IBC

Reconstitution of committee supersedes earlier interlocutory records, requiring claim disputes and challenges to be pursued in fresh reconstitution proceedings.

When an adjudicating order directs reconsideration and reconstitution of the committee of creditors, earlier interlocutory records of the superseded ... Reconstitution of Committee of Creditors - admission and determination of claims by the Resolution Professional - effect of setting aside the constitution of the Committee of Creditors on prior actions of the CoC - procedural recording of appointment/confirmation of Resolution Professional - proportional representation and voting share in the CoCReconstitution of Committee of Creditors - effect of setting aside the constitution of the Committee of Creditors on prior actions of the CoC - Survivability and maintainability of appeals against orders in I.A. No.2154 of 2024 and I.A. No.1712 of 2024 - HELD THAT: - The Tribunal held that I.A.2154 of 2024, filed to record the constitution of the first CoC, was superseded when the RP reconstituted the CoC and filed I.A.1712 of 2024 to record that reconstitution; nonetheless I.A.2154 was inexplicably kept alive but effectively merged with subsequent proceedings. Further, the Adjudicating Authority's order in I.A.1418 of 2024 set aside the earlier constitution and directed reconstitution of the CoC; the RP thereafter reconstituted the CoC and filed I.A.76 of 2025, which is pending. Consequently, nothing remains for adjudication in respect of I.A.1712 of 2024 and I.A.2154 of 2024 before this Tribunal, and the appeals against those interlocutory orders do not survive consideration. [Paras 7]Appeals against I.A.2154 of 2024 and I.A.1712 of 2024 do not survive and are not maintainable for adjudication before this Tribunal.Procedural recording of appointment/confirmation of Resolution Professional - admission and determination of claims by the Resolution Professional - proportional representation and voting share in the CoC - Validity of the Adjudicating Authority's order in I.A. No.1716 of 2024 recording confirmation of the IRP as RP and whether the appellant was aggrieved by that order - HELD THAT: - The Tribunal characterised the order in I.A.1716 of 2024 as procedural in nature-recording confirmation of the IRP as RP pursuant to the CoC decision-and not an adversarial determination that directly prejudiced the appellant. The appellant's core grievance related to alleged under-admission of its claim and reduction of its voting share; however, after the Adjudicating Authority's directions in I.A.1418 of 2024 the RP revisited and reaffirmed the admitted claim on 03.01.2025, and that reaffirmation has not been challenged by the appellant. Given the absence of a direct challenge to the RP's subsequent self-contained determination and the pending I.A.76 of 2025 (which arises from the reconstitution ordered on 18.12.2024), the Tribunal observed that the appellant's remedy lies in pursuing its contentions in the pending proceedings rather than impugning the procedural recording in I.A.1716. [Paras 7]No merit in the appeal against I.A.1716 of 2024; the order recording confirmation of the RP is procedural and does not sustain the appellant's challenge, which may be advanced in the pending I.A.76 of 2025.Final Conclusion: All three appeals are dismissed as devoid of merit: the appeals against I.A.2154 of 2024 and I.A.1712 of 2024 do not survive in view of subsequent reconstitution and proceedings, and the appeal against I.A.1716 of 2024 is without substance because the order was procedural and the appellant has not challenged the RP's subsequent reaffirmation of admitted claims; no costs. Issues: (i) Whether appeals against interlocutory applications I.A. No.2154 of 2024 and I.A. No.1712 of 2024 survive after reconstitution of the committee of creditors and subsequent orders; (ii) Whether the order recording confirmation of the interim resolution professional as resolution professional in I.A. No.1716 of 2024 is liable to be set aside; (iii) Whether the appellant's remedy in respect of disputed claim admission lies in the present appeals or in the pending proceedings arising from reconstitution (I.A. No.76 of 2025).Issue (i): Whether appeals against I.A. No.2154 of 2024 and I.A. No.1712 of 2024 survive consideration.Analysis: I.A. No.2154 recorded the constitution of an earlier committee of creditors and I.A. No.1712 recorded a subsequent reconstitution. The adjudicating order in I.A. No.1418 of 2024 set aside the earlier constitution and directed reconsideration and reconstitution. Following that direction the resolution professional reconstituted the committee and initiated fresh proceedings (I.A. No.76 of 2025). The effect of the order in I.A. No.1418 of 2024 is to supersede and merge the earlier I.A.s to the extent they record the now-set-aside constitution; the later reconstitution and pending application supplant the earlier recorded positions.Conclusion: The appeals against I.A. No.2154 of 2024 and I.A. No.1712 of 2024 do not survive. Conclusion in favour of Respondent.Issue (ii): Whether the order in I.A. No.1716 of 2024 confirming the interim resolution professional as resolution professional is liable to be set aside.Analysis: The application under Section 22(3) sought recording of the appointment arising from the committee of creditors' decision. The order recording confirmation is procedural in character. The respondent-side position includes that claim admission and voting shares were revisited under the December 18, 2024 direction and the resolution professional reaffirmed his earlier claim admission, a step which has not been challenged separately. The admissibility and quantum of the disputed claim and any allegation of connivance require determination in the proceedings instituted for reconsideration and in the pending I.A. No.76 of 2025 rather than by annulling a procedural confirmation order where no separate challenge has been pursued.Conclusion: The challenge to I.A. No.1716 of 2024 is without merit. Conclusion in favour of Respondent.Issue (iii): Whether the appellant's challenge to claim admission can be sustained in these appeals or must be pursued in the pending proceedings.Analysis: The Adjudicating Authority directed the resolution professional to revisit claim admission and reconstitute the committee; the resolution professional revisited and reaffirmed the admitted amount and has initiated fresh proceedings (I.A. No.76 of 2025). The appellant has not separately challenged the reaffirmation order of the resolution professional. The tribunal indicated that any factual or legal contest on claim admission is to be placed before the pending application arising from the reconstitution process.Conclusion: The appellant must pursue relief in the pending proceedings (I.A. No.76 of 2025). Conclusion in favour of Respondent.Final Conclusion: The appeals lack merit and are dismissed; no effective relief arises from the challenged interlocutory orders in view of the reconstitution and pending proceedings, and the appellant's available remedy lies in the ongoing reconstitution-related application.Ratio Decidendi: Where an adjudicating order directs reconsideration and reconstitution, earlier interlocutory orders recording a superseded constitution merge into and are displaced by the reconsideration process, and procedural confirmations of appointment are not set aside in the absence of a separate successful challenge when substantive claim reconsideration and fresh proceedings are pending.