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2021 (2) TMI 52 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - misuse of Section 420 of the Companies Act, 2013 - mistake apparent on the fact of record for which RP is seeking amendment - HELD THAT - It is admitted fact that the RP worked for only 39 days and the settled amount is ₹ 1250000/- and the expenses for 39 days is ₹ 17,75,638/- which seems unreasonable and excessive on the face of it. Further the order was passed after consent of both the sides. Further when the order was dictated the counsel appearing on behalf of the RP did not object and also did not brought the fact before the Appellate Tribunal that he is proxy counsel. The argument of the RP that the counsel was proxy counsel and he was not authorised, is an after thought. Further the RP has not made any complaint against the counsel Mr. Rituraj Biswas to the Bar Council of India. Petition dismissed.
Issues:
1. Settlement approval and direction for bank guarantee filing. 2. Appeal against order for unreasonable fees and expenses. 3. Resolution Professional's application for fee determination. 4. Supreme Court direction and liberty to Resolution Professional. 5. Resolution Professional's challenge against NCLAT order. 6. Misuse of Companies Act and alleged greediness of Resolution Professional. 7. Dismissal of Resolution Professional's application. Settlement approval and bank guarantee: The Operational Creditor initiated insolvency proceedings against the Corporate Debtor, leading to a settlement approved by the Tribunal. The Corporate Debtor was directed to file a bank guarantee of &8377; 17,75,638/- in favor of the Resolution Professional (RP) as part of the settlement. Appeal against unreasonable fees: The suspended director of the Corporate Debtor appealed the order, citing the fees and expenses of &8377; 17,75,638/- as unreasonable, excessive, and arbitrary, considering the RP's work duration of 39 days. The Appellate Tribunal partially allowed the appeal, limiting various expenses and fees to specific amounts. Resolution Professional's fee application: The RP filed an application seeking a determination of fees, highlighting that the fees could only be decided by the Committee of Creditors (COC) as per Section 34 of the Insolvency and Bankruptcy Code. The RP contested that the NCLAT order was not reasoned and incorrectly recorded consent without proper representation. Supreme Court direction and Resolution Professional's challenge: The RP approached the Supreme Court against the Appellate Tribunal's order. The Supreme Court directed the RP to pursue the interim application and granted liberty to move afresh if aggrieved by the NCLAT's order. Misuse of Companies Act and greediness allegation: The Respondent argued that the RP's application was a misuse of the Companies Act and not maintainable. Allegations of greediness were made, claiming the RP sought more money despite the CIRP proceedings being concluded. The Respondent raised concerns about the lack of authorization for consent and the excessive fees claimed. Dismissal of Resolution Professional's application: After hearing both parties, the Appellate Tribunal noted the RP's work duration, settled amount, and the expenses claimed. As the order was passed with the consent of both parties, no interference was deemed necessary. The RP's application was dismissed based on the lack of objection during the order dictation and the absence of complaints against the counsel's authorization. This comprehensive summary covers the key issues and detailed analysis of the legal judgment delivered by the National Company Law Appellate Tribunal in the case.
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