2022 (3) TMI 413 - AT - Insolvency and Bankruptcy

Legal expenses in defending the compliances instituted by the 1st Respondent before the Insolvency Bankruptcy Board of India and ICAI - grievance of the Appellant is that his remuneration on being appointed as Interim Resolution Professional of the Corporate Debtor was fixed at Rupees one lakh only, out of which Rupees Fifty Thousand Only was paid by the 1st Respondent - HELD THAT - The fee payable to the Appellant/Applicant and as such the balance of claim, this Tribunal comes to a consequent conclusion that the Instant Company Appeal stands Sans merits. It is of the earnest opinion that the Adjudicating Authority (National Company Law Tribunal, Chennai Bench-1, Chennai) had rightly opined by the COC had not approved the legal expenses payable to the Interim Resolution Professional and the legal cost incurred by him as required, in terms of the ingredients of the Regulation 33 that the Resolution Professional Regulations and further that the claim of the IRP could not be considered at this stage. Appeal dismissed.

Summary

Issues:
1. Claim for legal expenses incurred by the Interim Resolution Professional.
2. Rejection of balance remuneration claim by the Committee of Creditors.
3. Legal infirmity in the Impugned Order.
4. Liability of Committee of Creditors to bear expenses of the Insolvency Resolution Professional.
5. Lack of written communication affecting the claim.

Analysis:

1. The Appellant, an Interim Resolution Professional, claimed legal expenses incurred during the defense of compliances before regulatory bodies. The Appellant asserted that the expenses were duly approved through submitted invoices. However, the Appellant contended that the remuneration fixed at one lakh rupees was not fully paid, leading to a claim for the balance amount and legal expenses.

2. The Appellant's claim for balance remuneration and legal expenses was rejected by the Committee of Creditors, resulting in dissatisfaction. The Appellant highlighted being removed from the position before receiving the full payment, emphasizing a grievance regarding the rejection of the claim.

3. The Appellant challenged the Impugned Order, alleging legal infirmity. Reference was made to a previous Tribunal judgment to support the argument. However, the Tribunal found that the Appellant failed to provide essential written communication, impacting the credibility of the claim for balance remuneration and legal expenses.

4. The issue of the liability of the Committee of Creditors to bear the expenses of the Insolvency Resolution Professional was raised. Arguments were presented both in favor and against the liability. The Tribunal considered these arguments but ultimately found the lack of sufficient evidence to support the Appellant's claim.

5. The Tribunal, after thorough examination, concluded that the Impugned Order was legally sound. It was noted that the Committee of Creditors had not approved the legal expenses payable to the Interim Resolution Professional, as required by regulations. The absence of crucial written communication further weakened the Appellant's case, leading to the dismissal of the Company Appeal.

In conclusion, the Company Appeal was dismissed by the Tribunal, emphasizing the lack of merit in the Appellant's claim for balance remuneration and legal expenses, coupled with the failure to meet regulatory requirements and provide essential documentation.