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2021 (4) TMI 1064 - Tri - Insolvency and BankruptcySeeking fixing of the CIRP costs and fee of the applicant along with directions to the Respondent No. 1 to pay the same - section 60(5) of the I B Code, 2016 read with Regulations 33(2) of the Insolvency And Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016 read with Rule 11 of NCLT Rules, 2016 - HELD THAT - It is on record that CoC in its second meeting has not passed a resolution regarding approval of the fees of IRP nor regarding replacement of IRP with RP. In view of order of CIRP being impugned set aside by NCLAT, the IRP as a prudent officer is required to change reasonably and in our view a sum of ₹ 4 Lakhs plus @18% GST to be paid to 'Interim Resolution Professional' as his fees for period of 61 days. In addition, ₹ 1,86,890/- towards other expenses and ₹ 2 lakhs for security charges and other charges also to be paid to IRP. Thus, Interim Resolution Professional is allowed a total amount of ₹ 7,86,890/- Lakhs approximately which is to be paid by the Respondent No. 2 which should be paid within two weeks. Application allowed.
Issues:
1. Fixing of CIRP costs and fee of the applicant under I & B Code, 2016. 2. Expenses incurred by the Interim Resolution Professional during the Corporate Insolvency Resolution Process. 3. Dispute over the amount of CIRP costs and fee charged by the Interim Resolution Professional. 4. Approval of fees and replacement of the Interim Resolution Professional with the Resolution Professional by the Committee of Creditors. Issue 1: Fixing of CIRP costs and fee The application sought the fixing of the Corporate Insolvency Resolution Process (CIRP) costs and fee of the applicant, the erstwhile Interim Resolution Professional, under the Insolvency & Bankruptcy Code, 2016. The order admitted the petition filed by the Operational Creditor against the Corporate Debtor, appointing the Interim Resolution Professional and directing the Operational Creditor to deposit a sum for expenses. The NCLAT, in an appeal, directed the fixing of CIRP costs and fees to be paid by the Corporate Debtor, recoverable from the Operational Creditor. Issue 2: Expenses incurred during CIRP The Interim Resolution Professional incurred various expenses during the CIRP process, including deploying security guards, verifying claims, engaging professionals, and maintaining the company as a going concern. The expenses totaled ?7,01,037, covering security, legal, and other expenses. The IRP also proposed a professional fee of ?5 lakhs per month, including staff and consultants, which was to be decided in the CoC meetings. Issue 3: Dispute over CIRP costs and fee The Corporate Debtor disputed the claimed CIRP costs and fee, alleging overcharging by the IRP. The Corporate Debtor contended that the expenses pattern was inconsistent, and the proposed fee of ?5 lakhs per month was unjustified, considering the roles and salaries of senior officials. The Corporate Debtor argued that the fees and costs were inflated, rising by 200% during the process. Issue 4: Approval of fees and replacement of IRP The Committee of Creditors did not pass a resolution regarding the approval of the fees of the Interim Resolution Professional or the replacement of the IRP with the Resolution Professional in the CoC meetings. The NCLAT set aside the CIRP order, and the Tribunal, considering the circumstances, fixed the IRP fees at ?4 lakhs for the period of 61 days, along with other expenses and security charges, totaling ?7,86,890 to be paid by the Corporate Debtor within two weeks. In conclusion, the Tribunal allowed the application, directing the payment of the fixed amount towards CIRP costs and fee to the Interim Resolution Professional, in compliance with the NCLAT's directions. The dispute over the expenses and fees incurred during the CIRP process was settled, providing clarity on the amount to be paid by the Corporate Debtor within the specified timeline.
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