Regulation 31A of the IBBI (Liquidation Process) Regulations, 2016, mandates that a liquidator must constitute a Stakeholders' Consultation Committee (SCC) to ensure transparency, accountability, and creditor participati

Regulation 31A of the IBBI (Liquidation Process) Regulations, 2016 mandates that the Liquidator shall constitute a Stakeholders' Consultation Committee (SCC) comprising of all creditors of the corporate debtor, within sixty days from the liquidation commencement date. SCC comprises of all creditors of the corporate debtor, includes representatives from all classes of stakeholders, such as financial creditors, operational creditors, workmen, and employees. It is formed to advise him on matters- (a) remuneration of professionals appointed under regulation 7; (b) sale under regulation 32, including manner of sale, pre-bid qualifications, reserve price, marketing strategy and auction process.; (c) fees of the liquidator; (d) valuation under sub- regulation (2) of regulation 35; (e) the manner in which proceedings in respect of preferential transactions, undervalued transaction, extortionate credit transaction or fraudulent or wrongful trading, if any, shall be pursued after closure of liquidation proceedings and the manner in which the proceeds, if any, from these proceedings shall be distributed; (g) continuation or institution of any suits or legal proceedings by or against the corporate debtor; (h) extension of payment of balance sale consideration as provided in clause (12) of Para 1 of Schedule I, beyond ninety days, to be disclosed in the auction notice. It may be noted that- A secured creditor who has not relinquished his security interest under section 52 shall not be part of the consultation committee; Promoters, directors, partners or their representatives may attend the meeting of the consultation committee, but shall not have any right to vote. Financial creditor or his representative, if he is a related party of the corporate debtor, shall not have right to vote.