By S&S Co. Advocates & Solicitors · Published 29 September 2026 · Informational content, not legal advice: see our disclaimer
Overview
A guide for financial creditors, resolution applicants and other CIRP stakeholders explaining the statutory voting thresholds that apply to different Committee of Creditors decisions, and the limited scope for judicial review of the CoC's commercial wisdom.
What You Need to Know
- Most significant CoC decisions, including approval of a resolution plan: require the approval of financial creditors holding not less than 66% of the voting share, while a range of other operational decisions during CIRP require a simple majority of 51% or more, depending on the specific matter under the CIRP Regulations.
- Voting share is computed based on the financial debt owed to each financial creditor, meaning voting power is broadly proportionate to exposure rather than a one-creditor-one-vote system, and related-party financial creditors are excluded from the CoC's voting composition in most circumstances under Section 21(2).
- The 'commercial wisdom' doctrine, developed through a consistent line of decisions, holds that once the CoC has approved a resolution plan by the requisite majority, the adjudicating authority's role is confined to satisfying itself that the plan meets the mandatory requirements of Section 30(2): it cannot substitute its own commercial judgment for that of the creditors on matters such as valuation, feasibility or the adequacy of recovery.
- Judicial review of a CoC decision remains available on limited statutory grounds, including non-compliance with the mandatory contents a plan must include, failure to provide operational creditors their minimum statutory entitlement, or a breach of natural justice in the CoC's own decision-making process.
- A dissenting financial creditor who votes against an approved plan retains statutory protection to the extent of receiving at least the liquidation value attributable to its debt, or the amount it would receive on a distribution under Section 53, whichever is higher: this protects the dissenting minority without allowing it to block a majority-approved plan.
Frequently Asked Questions
What voting threshold is required to approve a resolution plan?
Approval requires financial creditors holding not less than 66% of the voting share in the Committee of Creditors to vote in favour of the resolution plan.
Can a court override the CoC's commercial decision to approve a particular resolution plan over a rival bid?
Ordinarily no: the commercial wisdom of the CoC in choosing between competing resolution plans is treated as non-justiciable, and judicial review is confined to statutory compliance rather than commercial adequacy.
What protection does a dissenting financial creditor have if it votes against the approved plan?
A dissenting financial creditor is statutorily entitled to receive an amount not less than what it would have received in a liquidation under the Section 53 waterfall, even though the plan was approved over its dissent.
References & Further Reading
This guide references the following statutes, rules and sources, cross-checked at the time of writing.
- 66% voting threshold for resolution plan approval under Section 30(4) and related CoC voting mechanics: well-settled statutory framework, confirmed via IBC Laws and practitioner commentary at research time
- Commercial wisdom doctrine and its limited judicial review grounds: well-settled through a consistent line of tribunal and appellate decisions, confirmed at research time
- Dissenting financial creditor's minimum-recovery protection under Section 30(2)(b): confirmed at research time
- See also our IBC & Insolvency Notable Judgments and Legal Updates: IBC & Insolvency archive.