2020 (11) TMI 957 - AT - Insolvency and Bankruptcy

Seeking payment of his fee by IRP and staying of his replacement - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the instant case, the sole Financial Creditor (Indian Bank) has voted to replace the Resolution Professional under Section 22 of the I B Code which means the replacement is sought with 100% voting shares while the requisite vote is 66%. It is well settled that the commercial wisdom of the Committee of Creditors which covers matters including the replacement of the Resolution Professional does not fall within the limited scope of judicial review and is not justiciable. Fees of IRP - HELD THAT - The Adjudicating Authority has rightly observed that under Regulation 33(3) of the IBBI, fee has been fixed by the Committee of Creditors at ₹ 50,000/- which does not brook interference - In view of the same, we are not inclined to interfere with the impugned order which does not suffer from any legal infirmity. Appeal dismissed.

Summary

Issues:
1. Challenge to the replacement of the Interim Resolution Professional.
2. Seeking payment of fee by the Interim Resolution Professional.

Replacement of Interim Resolution Professional:
The Appellant, who was appointed as the Interim Resolution Professional, approached the Adjudicating Authority under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking payment of fee and staying of his replacement. The Adjudicating Authority declined the prayer, stating that the wisdom of the Committee of Creditors is not subject to challenge. It was noted that the sole Financial Creditor had voted to replace the Resolution Professional under Section 22 of the I&B Code with 100% voting shares, while the requisite vote is 66%. The Tribunal emphasized that the commercial wisdom of the Committee of Creditors, including the replacement of the Resolution Professional, is beyond the scope of judicial review and is non-justiciable.

Payment of Fee by Interim Resolution Professional:
Regarding the issue of fee, the Adjudicating Authority correctly pointed out that the fee had been fixed by the Committee of Creditors at ?50,000 under Regulation 33(3) of the IBBI. The Tribunal affirmed that the fee determination by the Committee of Creditors is not open to interference. Consequently, the Tribunal found no legal infirmity in the impugned order and declined to intervene. The appeal was dismissed without any costs being awarded.

In conclusion, the National Company Law Appellate Tribunal upheld the decision of the Adjudicating Authority, emphasizing that the replacement of the Interim Resolution Professional based on the Committee of Creditors' commercial wisdom is not subject to judicial review. Additionally, the Tribunal affirmed the Committee's authority in fixing the fee for the Interim Resolution Professional, thereby dismissing the appeal on both issues.