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2021 (10) TMI 594 - Tri - Insolvency and BankruptcySeeking release of amount towards his professional fees and other expenses incurred by him during the CIRP - HELD THAT - It is an admitted fact that the CIRP initiated against the respondent is set aside by the Hon'ble NCLAT and while disposing of the appeal the Hon'ble NCLAT it was observed that the Adjudicating Authority will fix the fee of IRP for the period he has functioned and in pursuance of that direction, the present application is filed. A bare perusal of the Regulation 33 shows that it is the applicant, who shall fix the expenses to be incurred on or by the IRP and if the same has not been fixed, the Adjudicating Authority shall fix the expenses and the applicant shall bear the expenses, which shall be reimbursed by the Committee (COC) to the extent it ratifies - Here in the case in hand, admittedly, there was no CoC constituted, therefore, it is directed the IBBI to examine the fee and expenses claimed by the applicant, which in its report has stated the admissible fee and expenses, which the applicant is entitled to get. It is accepted that all the recommendation of the IBBI, except towards the expenses incurred for the public announcement. Although the IBBI has rejected the claim of second public announcement, since the public announcement has been made and that has not been denied, hence it is approved/granted that the cost/expenses incurred towards the second public announcement too. The Corporate Debtor is directed to pay total amount of ₹ 6,38,470/- only towards his fee and other expenses, within a month from today - application disposed off.
Issues Involved:
1. Entitlement of the Interim Resolution Professional (IRP) to professional fees and expenses. 2. Determination of the amount of fees and expenses. 3. Responsibility for payment of the fees and expenses. Issue-wise Detailed Analysis: 1. Entitlement of the Interim Resolution Professional (IRP) to Professional Fees and Expenses: The application was filed under Rule 11 of the National Company Law Tribunal Rules, 2016, seeking the release of ?24,83,471 towards the IRP's professional fees and expenses incurred during the CIRP. The NCLAT had previously set aside the CIRP and directed the Adjudicating Authority to fix the IRP's fees for the period he functioned. The IRP claimed fees and expenses for the period from March 2020 to August 2020. 2. Determination of the Amount of Fees and Expenses: The respondent objected, arguing that the NCLAT did not specify that the corporate debtor should pay the fees and that the expenses should be borne by the applicant and reimbursed by the CoC, which was not constituted in this case. The IBBI was directed to examine the matter and submitted a report, which found the claimed fees of ?17,70,000 to be unreasonable and recommended a total fee of ?2,00,000 (?40,000 per month). The IBBI also reviewed other expenses and suggested the following: - ?47,074 for the first public announcement. - Rejection of ?48,646 for the second public announcement. - ?1,75,000 for claim verification was not acceptable as it is the IRP's duty. - ?42,750 towards other expenses was acceptable. - ?3,00,000 for legal retainership was considered reasonable. The applicant contested the IBBI's findings, arguing that the proposed fees were reasonable given the responsibilities and compared it to fees in other CIRP cases. The applicant also justified the second public announcement as compliance with NCLAT's directions. 3. Responsibility for Payment of the Fees and Expenses: The Tribunal, after considering the submissions and the IBBI report, concluded that the IRP is entitled to receive: - ?2,00,000 towards total fees. - ?3,00,000 towards legal retainership. - ?42,750 towards other expenses. - ?95,720 for both public announcements. The total amount approved was ?6,38,470. The Tribunal directed the corporate debtor to pay this amount within a month, noting that since the CIRP was terminated and no CoC was constituted, the corporate debtor was responsible for the payment. Conclusion: The IRP is entitled to a total of ?6,38,470 for his fees and expenses, which the corporate debtor must pay within a month. The Tribunal accepted most of the IBBI's recommendations but included the cost of the second public announcement. The application was disposed of accordingly.
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