IBBI Suspends Insolvency Professional for Incorrect CoC Voting Computation

IBBI’s Disciplinary Committee has suspended the Authorisation for Assignment of insolvency professional Fanendra Harakchand Munot for three months after finding that he excluded State Bank of India’s 8.32 per cent voting share while calculating approval of a resolution plan. The plan had secured only 61.31 per cent of the CoC’s total voting share, below the statutory 66 per cent threshold, but was presented as having received approximately 67 per cent approval.

Key Highlights :

• Order No. IBBI/DC/349/2026 was issued on 30 October 2026.
• The CIRP concerned Shree Bhimeshwari Ispat Private Limited; the resolution plan was submitted by Khatav Man Taluka Agro Processing Limited.
• In the 8th CoC meeting on 21 October 2020, 61.31 per cent voted in favour, 30.37 per cent against and SBI, holding 8.32 per cent, did not vote.
• The RP excluded SBI’s share from the denominator and represented the adjusted result as approximately 67 per cent in favour.
• The Disciplinary Committee held that non-voting creditors cannot be carved out as a separate category for Section 30(4) computation.
• The Authorisation for Assignment is suspended for three months; the order takes effect after 30 days from issue.

Background :

• CIRP commenced on 28 November 2019 following a Section 7 application by Oriental Bank of Commerce; Munot was appointed IRP and became RP on 4 January 2020.
• The NCLT Mumbai Bench, by order dated 28 April 2025 in IA No. 141/2023 in CP IB No. 4550/MB-II/2018, held that SBI’s voting share could not be excluded merely because it did not cast a vote.
• The RP relied on Tata Steel Ltd. v. Liberty House Group and an interim observation in IDBI Bank Ltd. v. Anuj Jain; IBBI distinguished those circumstances and relied on the Supreme Court ruling in K. Sashidhar.

What Has Changed :

Issue- Calculation of CoC approval Section 30(4) requires at least 66 per cent of the voting share of financial creditors.

Finding- SBI’s 8.32 per cent remained part of the total voting share despite not voting; support was only 61.31 per cent.

Outcome- The plan could not be treated as approved on the original vote.

Issue- Disclosure before NCLT

Finding- The application showed 67 per cent in favour and 33 per cent against without explaining that SBI’s share had been removed from the denominator. 

Outcome- The Committee found the presentation materially misleading and not a mere bona fide interpretative error.

Issue- Professional duties

Finding- The RP failed to correctly ascertain and record the vote and did not fully disclose the calculation basis. 

Outcome- Contraventions of the IBC, CIRP Regulations, IP Regulations and Code of Conduct were established.

Issue- Disciplinary consequence 

Finding-Section 220 of the Code read with Regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017. 

Outcome- Authorisation for Assignment suspended for three months; effective after 30 days.

Who Is Affected :

• Insolvency professional Fanendra Harakchand Munot.
• Committees of creditors of corporate debtors for which he is providing services; copies are to be sent to those CoCs.
• The Indian Institute of Insolvency Professionals of ICAI and the Registrar of the NCLT Principal Bench are to receive the order.

Compliance Action Points :

• The concerned CoCs should consider the order when reviewing the RP’s ongoing assignments; the order itself directs circulation to them. Form / portal: Not stated in source. Due date: Not stated in source.
• The insolvency professional should observe the three-month suspension after the 30-day commencement period. Consequence: Authorisation for Assignment remains suspended for the stated period.

Analysis & Impact :

• CA / CS / Tax & Legal Professionals: When computing a resolution-plan vote, retain the full voting share of financial creditors in the denominator; non-participation does not automatically permit exclusion. Record the raw votes and the statutory calculation transparently in the application to the adjudicating authority.
• Businesses & Investors: Incorrect vote computation can delay plan approval and prolong CIRP; the order records that the plan had to be remitted to the CoC for reconsideration.
• Points to Watch: The order notes that the CoC subsequently approved the same applicant’s plan with 96.50 per cent voting share and the NCLT approved it on 15 October 2026. IBBI nevertheless held that later approval did not cure the earlier breach.

References :

• Insolvency and Bankruptcy Code, 2016 – Section 30(4): minimum CoC voting threshold for approval of a resolution plan.
• IBC – Sections 208(2)(a), 208(2)(e) and 220: duties of insolvency professionals and disciplinary power.
• IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 – Regulation 26: electronic voting and recording of decisions.
• IBBI (Insolvency Professionals) Regulations – Regulations 7(2)(a) and 7(2)(h), and First Schedule Code of Conduct, Clauses 1, 2, 12 and 14.
• IBBI (Inspection and Investigation) Regulations, 2017 – Regulation 13: disciplinary process.
• K. Sashidhar v. Indian Overseas Bank, (2019) 12 SCC 150; Tata Steel Ltd. v. Liberty House Group; IDBI Bank Ltd. v. Anuj Jain; Jaiprakash Associates Ltd. v. IDBI Bank Ltd.

Source & Attribution :

IBBI Disciplinary Committee, Order No. IBBI/DC/349/2026, dated 30 October 2026. Official document supplied by the user; public URL not stated in source.

Disclaimer: This summary is an editorial aid prepared from publicly available information. It is not legal, tax or investment advice. Refer to the original notification, circular, order or report before acting.