Under the Insolvency and Bankruptcy Code (IBC), 2016 Insolvency Resolution Professional (IRP) is required to provide eVoting option to creditors. A Committee of Creditors (CoC) is formed where all the creditors of the debtor company are members and their voting weightage is determined on the basis of the amount outstanding. Each member of the creditor’s committee has the right to vote on all important matters. The Insolvency Resolution Professional (IRP) / Resolutions Professional (RP) / Interim Resolution Professional (IRP) / Liquidator is expected to take opinion of all the members in form of vote on all important matters.
Yes, providing remote voting option in electronic form is mandatory under Insolvency and Bankruptcy Code (IBC), 2016. Although IBC explicitly does not insist on using eVoting platforms, however, it stipulates that all member of committee of creditors should be provided option to vote during the meeting and also after the meeting. It also provides that members of CoC should have the option to vote remotely. Few IRPs have interpreted it to mean that they can take the vote on email or WhatsApp. However, that is not the best practice and is avoidable. Using a proper government of India approved eVoting platform like Right2Vote not only ensures proper documentation and compliance with the process but also helps when result is to be filed with National Company Law Tribunal (NCLT).
WHY RIGHT2VOTE
Features recommended for Committee of Creditors Voting
TIME EXTENSION feature is very useful in case of creditors’ voting under IBC. For various reason including delay in approval from bank management or court instructions at times the voting duration has to be extended. Right2Vote offers free time extension feature where insolvency professional can extent the time of the poll multiple times free of charge.
Right2Vote provide the result of the eVoting in both PDF and excel format. The PDF format gives the synopsis of the result with Right2Vote watermark. The PDF format is useful for circulation among creditors and for submission to court / NCLT. Right2Vote also provides result in excel format where audit trail details like IP address and time of voting is also available. This is to be used for audit purpose. As eVoting under IBC does not require SECRET BALLOT feature, the details excel result also provides individual voter vote preference.
Benefits of using Right2Vote eVoting platform for CoC voting
01
Tested, certified and approved by Government of India
As eVoting results need to be presented in the court / NCLT, it is always better to use a government
of India certified platform.
02
Right2Vote’s 24*7*365 DIY platform & responsive support team
Right2Vote’s eVoting platform is very easy to use and intuitive DO IT YOURSELF (DIY) platform. Insolvency professionals and their team can set up polls in the platform at any time of the day and setting up the poll does not take more than 15 minutes. Right2Vote support team is also very
responsive and set up polls for the clients on short notice. Many a times during emergency,
clients ask Right2Vote’s team to set up poll on 5-minute notice and Right2Vote team executes it
without any delay. No other eVoting platform in India or abroad can match the responsiveness
of Right2Vote’s support team.
03
Cost Effective
Right2Vote is the most cost-effective platform for eVoting under IBC. Right2Vote charges only Rs. 5000 + GST for Committee of Creditor’s eVoting for up to 200 creditors.
Right2Vote also does not charge extra for long duration or for time extension in case of CoC
eVoting.
04
Time and effort saving
Conducting Committee of Creditor’s eVoting using Right2Vote’s online voting technology saves lot of time and effort for the insolvency professionals. From setting up
the poll, to sending invite, sending reminders, creditor authentication, vote recording,
calculating results – everything is done by the system automatically saving lot of time and effort
for IRPs. This enables busy IRPs to focus their energies and resources on other important and
urgent matters.
05
Convenience for creditors leading to better participation
Creditors are busy people and it is not possible for them to attend all meeting of CoC or physically visit the IRP office for voting on all
matters. Online voting enables committee members to vote anytime from anywhere. This not
only saves time and effort of the creditors but also lead to better participation and higher voter
turnout in voting.
06
Security and transparency
Right2Vote’s eVoting platform is not only secured with encryption, OTP based authentication and other features but is also very transparent with features like
audit trail, voter receipt and
vote record.
07
Feature rich
Right2Vote provides many other optional features like
Team election, voter selfie, double authentication, biometric authentication and
multiple votes - limited.
Based on specific required of the poll, insolvency professionals can use these
additional features. Unlike most other platform Right2Vote offers flexibility to use advanced
features in critical and more sensitive polls like selection of Insolvency professional or approval
of resolution plan.
08
Trusted by leading insolvency firms
eLeading insolvency firms and insolvency professional
including AAA Insolvency, Sumedha Management, PwC, KPMG, Deloitte, Alvarez and Mashal are
using
eVoting, Video Conference, Virtual Data Room and
eAuction services of Right2Vote for insolvency matters.
USE CASES
Kinds of eVoting for Committee of Creditors
01
Resolution voting
Voting on resolutions is the most common type of eVoting done in IBC matters. After almost each CoC meeting eVoting is required on important matters.
Generally, in such matters there are three options:
Accept / Yes / Approve
Reject / No / Disapprove
Abstain
02
Appointment or selection of professionals / firms
Right2Vote's eVoting platform also provides option of setting up eVoting on matters like selection of resolution professional, authorised representatives, auditors, valuer, lawyer or other service providers. In such eVoting additional features like picture of the candidate on the ballot page, multiple selection, team election can be used based on specific requirement.
03
Approval of resolution plan
Approval of resolution plan is one of the most important matters put up to vote under in IBC matters. As high stakes are involved it is very important to maintain security and transparency in such matters. Right2Vote also provides a feature to upload the resolution plan on the voting platform so that it can be viewed and evaluated by the creditors before voting. Right2Vote also provide Virtual Data Room (VDR) facility for uploading and sharing important document with restricted access with creditors and others. Right2Vote also provide eAuction facility in case the need arises as part of the liquidation process or for disposing off assets.
PROCESS
Procedure of Committee of Creditors eVoting
Disclaimer:
Right2Vote is an online voting platform and not a qualified legal advisor.
Kindly consult qualified legal advisors for better understanding of the law
and process relating to CoC meeting and eVoting. The below text is only for
guidance purpose based on our limited understanding. The law keeps on changing
and evolving. You are requested to consult and confirm with a qualified lawyer
and use this for guidance only.
For committee of Creditors eVoting following points should be kept in mind:
01
Members of the committee of creditors have the option to vote during the
meeting or post circulation of minutes. If few members opt to vote during
the meeting and few post circulation of the minute of the meeting, online
voting option can be given only to those who opt to vote remotely post
circulation of minutes. However, as a best practice, IRP / RP / Liquidator
can request all the members to register the vote on the online platform
for transparency and record purposes.
02
Minutes of CoC meeting should be circulated within 24 hours of the end of
CoC meeting.
03
eVoting should start only after the circulation of minutes of the meeting
and within 48 hours of the end of CoC meeting.
04
Voters should be provided a minimum of 24 hours of voting window to enable
them to vote.
05
IRP / RP / Liquidator can extend the voting window on the request of the
creditors; however, it should be maximum for one day at a time
(recent amendment).
06
For general resolutions, voters with a vote share of more than 50% should
accept or approve the resolution. If the voter does not vote or abstain
from voting, that also effectively means a negative vote, as the requirement
is more than 50% positive vote. Note: The rule is different
in the case of voters in a class / home buyer voting.
07
For special resolutions, voters with a vote share of more than 66% should
accept or approve the resolution. If the voter does not vote or abstain
from voting, that also effectively means a negative vote, as the requirement
is more than 66% positive vote. Note: The rule is different
in the case of voters in a class / home buyer voting.
08
In CoC voting, all members do not have equal vote share. Vote share is
determined based on the outstanding amount of each creditor.
09
Once the eVoting is set up and invite sent to voters, there should not be
any change in voting agenda. Voting agenda is frozen at the time of
circulation of minutes. Change of text of the resolutions when the voting
has started can lead to frauds and hence is not allowed. If there is no
option but to change the text of the resolutions, then the current voting
should be cancelled and fresh voting should be initiated with revised text.
10
In matters where creditors in a class are there, they are represented in
the CoC meeting through an Authorised Representative (AR). Creditors in a
class might be home buyers, unsecured creditors, debenture holders or any
other class.
Right2Vote's sister company
https://Time2Justice.ai
also provides legal assistance service with help of AI. You can visit the
website of time2justice if you have any further queries.
If you want to try out our eVoting services please contact us
by emailing us at contact@right2vote.in or call us at 9920591306.
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IBC eVoting refers to the electronic voting process used by creditors during insolvency proceedings under the Insolvency and Bankruptcy Code. It allows members of the Committee of Creditors to vote remotely on important resolutions and other matters.
How does CoC voting work under the Insolvency and Bankruptcy Code?
CoC voting is generally based on the voting share of each creditor, which is determined according to the outstanding amount. This makes weighted voting an important feature of an IBC eVoting platform.
Why is an online platform used for Committee of Creditors voting?
An online platform can automate invitations, reminders, voter authentication, vote recording, and weighted result calculation. It also enables creditors to participate remotely and maintains digital records of the voting process.
What is the difference between normal voting and CoC weighted voting?
In normal voting, each voter generally has one equal vote. In Committee of Creditors voting, the voting share of a creditor is determined based on the outstanding amount owed to that creditor, requiring a weighted vote calculation.
Can creditors vote remotely in IBC insolvency voting?
Yes. The page explains that members of the Committee of Creditors should be provided an option to vote remotely in electronic form, allowing creditors to participate without needing to be physically present at the voting location.
What documents and results are generated after CoC eVoting?
CoC eVoting results can be provided in PDF and Excel formats. The detailed records may include voting-related audit information such as voting time and IP address, making them useful for circulation, audit, and submission purposes.
How can an IBC eVoting platform improve transparency in insolvency voting?
Transparency can be supported through features such as audit trails, voter receipts, vote records, OTP-based authentication, and detailed voting results. These features help maintain records of the voting process and voter activity.
What types of decisions require Committee of Creditors voting?
Committee of Creditors voting may be used for resolution voting, selection or appointment of professionals and firms, and approval of resolution plans. Additional voting features can be configured depending on the specific requirements of the matter.
How long does an IBC eVoting window remain open?
The page states that eVoting should provide creditors with a minimum 24-hour voting window. The voting window may also be extended in applicable circumstances, subject to the relevant process and requirements.
How can Right2Vote help with Committee of Creditors voting?
Right2Vote provides an online eVoting platform for CoC voting with features such as weighted voting, audit trails, OTP-based authentication, voter receipts, reminders, vote change options, time extension, and PDF and Excel result reports. These features are designed to support insolvency professionals and creditors during the voting process.
To know more about Right2Vote's election technology, please refer:
