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2020 (1) TMI 1610 - AT - Insolvency and BankruptcyDirection to the 'Committee of Creditors' to pay the fees and cost incurred by the 'Interim Resolution Professional' - Liquidation of Corporate Debtor - HELD THAT - Admittedly, Mr. B. Santosh Babu performed the duty of the 'Interim Resolution Professional' and constituted the 'Committee of Creditors' and thereafter, continued to function even beyond 30 days with designation of the 'Interim Resolution Professional' and as he moved an application for liquidation (though designated continue as Interim Resolution Professional ), we agree with the observations made by the Adjudicating Authority that the 'Committee of Creditors' is to pay the fees and cost incurred by Mr. B. Santosh Babu, 'Interim Resolution Professional', who also acted during the resolution process beyond 30 days till the date of liquidation having not allowed to continue as Liquidator. If Mr. B. Santosh Babu- 'Interim Resolution Professional' who continued till the order of impugned order of liquidation was passed, would have been allowed to continue as Liquidator and only in such case, the payment could have been made to him as Liquidator in terms of Section 34(8) of the 'I B Code'. Application disposed off.
Issues involved:
1. Payment of fees and costs incurred by the Interim Resolution Professional. 2. Liability of the Committee of Creditors to pay the fees and costs. 3. Role of the Interim Resolution Professional during the resolution process. 4. Applicability of Section 34(8) of the Insolvency and Bankruptcy Code. 5. Dismissal of the appeal with costs. Analysis: 1. The Committee of Creditors recommended liquidation of the Corporate Debtor, leading to an order of liquidation by the Adjudicating Authority. The Interim Resolution Professional, Mr. B. Santosh Babu, sought payment of his outstanding fees and costs following the liquidation order. 2. The Appellant, representing the Committee of Creditors, contested the direction to pay the Interim Resolution Professional's fees, arguing that the applicant under Section 9 should bear these costs. However, it was noted that Operational Creditors, like the applicant, may not receive any amount during liquidation as they are not Secured Creditors, thus cannot be obligated to pay the fees. 3. Mr. B. Santosh Babu, as the Interim Resolution Professional, played a crucial role in constituting the Committee of Creditors and continued to function beyond the initial 30 days. The Adjudicating Authority ruled that the Committee of Creditors is liable to cover the fees and costs incurred by Mr. Babu during this extended period until the liquidation order. 4. The judgment highlighted that if Mr. Babu had been allowed to transition from Interim Resolution Professional to Liquidator, payment could have been made to him under Section 34(8) of the Insolvency and Bankruptcy Code. However, since this transition did not occur, the fees were to be covered by the Committee of Creditors. 5. The Appellant's argument regarding the high fees charged by the Resolution Professional was deemed frivolous, leading to the dismissal of the appeal with a cost of Rs. 1,00,000. This decision reinforced the responsibility of the Committee of Creditors to cover the fees and costs of the Interim Resolution Professional in such circumstances.
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