NCLT rejects IP's voting math, orders SBI share included in denominator

It matters to citizens as it addresses the integrity of the insolvency process and the accountability of professionals appointed to manage corporate debt restructuring.

Who it concerns: Mr. Fanendra Harakchand Munot (Insolvency Professional), the Insolvency and Bankruptcy Board of India (IBBI), the Disciplinary Committee, and stakeholders in the Corporate Insolvency Resolution Process (CIRP) of Shree Bhimeshwari Ispat Private Limited, including the Committee of Creditors (CoC) and State Bank of India (SBI).

What the Board found or ordered

• The IBBI Disciplinary Committee disposed of a Show Cause Notice (SCN) issued to Mr. Fanendra Harakchand Munot for alleged contraventions of the Insolvency and Bankruptcy Code, 2016, and related regulations.
• The core allegation is that the IP incorrectly computed the voting results for a resolution plan by excluding the voting share of State Bank of India (SBI) from the denominator because SBI did not cast a vote, thereby declaring the plan approved with approximately 67% support instead of the actual 61.31% of total voting share.
• The IP was found to have misrepresented the approval status of the resolution plan before the National Company Law Tribunal (NCLT) based on this incorrect calculation.
• The NCLT had previously held that SBI's voting share could not be excluded from the denominator merely because it did not vote, and remitted the plan for reconsideration, causing delay in the process.
• The IP contended that his calculation was based on a bona fide legal interpretation and that he had disclosed the raw voting results to the court.
• The IBBI prima facie viewed that the IP contravened Sections 30(4), 208(2)(a), and 208(2)(e) of the Code, Regulation 26 of the CIRP Regulations, and specific clauses of the Code of Conduct.

Also in the document

• The dispute centers on the methodology for calculating the voting threshold under Section 30(4) of the Code when a creditor attends the meeting but does not cast a vote in the electronic voting system.
• The IP cited judgments such as IDBI Bank Ltd. v. Anuj Jain and Tata Steel Ltd. v. Liberty House Group Pvt. Ltd. to support his exclusion of non-voting creditors from the denominator.
• The NCLT order dated 28.04.2025 explicitly rejected the IP's methodology, stating that the voting share of SBI must be included in the total denominator for calculating the approval percentage.
• The IP submitted that he had explicitly placed the raw, unadjusted e-voting results (61.31% in favor) before the court in his application, arguing there was no intent to mislead.