Decision To Consolidate CIRP Can Be Taken By CoC And Not By Suspended Director Of Corporate Debtors: NCLT Hyderabad

The NCLT Hyderabad held that decisions to consolidate multiple Corporate Insolvency Resolution Processes (CIRPs) must be taken by the Committee of Creditors (CoC), not by the suspended directors of the corporate debtors. The case involved a dispute where suspended directors challenged the consolidation of CIRPs, alleging procedural lapses. The tribunal clarified that the CoC has the exclusive authority to decide on consolidation, ensuring that the process aligns with stakeholder interests. Legal analysts view this ruling as reinforcing the CoC’s central role in insolvency proceedings and ensuring that directors under suspension cannot interfere with the process. The decision strengthens the governance and fairness of CIRP mechanisms under the IBC. It also provides guidance on the procedural protocols for consolidation, ensuring that such decisions are made transparently and in the best interests of creditors.