2022 (3) TMI 993 - Tri - Insolvency and Bankruptcy

Seeking permission to appoint Mr. Parameswaran Nair as the RP of the Corporate Debtor M/s. Samson and Sons Builders and Developers Pvt. Ltd. - HELD THAT - On going through the Minutes of the 2ndMeeting of the CoC held on 10.01.2022 and the written consent in Form AA-Under Regulation 3(1A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of Mr. K Parameswaran Nair who agreed to act as the Resolution Professional and the CoC resolved to appoint him - In the 1st meeting of CoC held on 23.12.2021 as Item No. B5 the appointment of Resolution Professional and to fix his fee was discussed in which it is stated that the IRP informed the members of CoC that he is eligible to be appointed as Resolution Professional on a Professional fee of ₹ 5,00,000/- per month. It is also stated that since all the Coc members disagreed to the professional fee quoted by the IRP, the IRP may reconsider or revive the fee, however IRP informed that if a competitive fee is not offered the IRP shall decline to be appointed as an RP. In the 2nd CoC meeting held on 10.01.2022, the CoC as Resolution No. B3 resolved that Shri. K. Parameswaran Nair be appointed as the RP of M/s. Samson and Sons Builders and Developers Pvt. Ltd. (Corporate Debtor). Under Section 22 (3) (b) of IBC in order to replace the IRP and appoint another professional as RP, the CoC is competent to file an application before the Adjudicating Authority for the appointment of the proposed Resolution Professional along with his written consent. Since the CoC did not accept the fee quoted by the IRP, which is on the higher side, they have resolved to appoint another Insolvency Professional as RP and filed this application enclosing the written consent of Shri. K Parameswaran Nair. Application disposed off.

Summary

Issues:
1. Application for appointment of Resolution Professional under Section 22(3)(b) of the Insolvency and Bankruptcy Code, 2016 (IBC).
2. Disagreement over professional fees between the Interim Resolution Professional (IRP) and Committee of Creditors (CoC).
3. Appointment of a new Resolution Professional (RP) due to fee dispute.
4. Compliance with IBBI regulations and written consent for RP appointment.
5. Legal provisions under Section 22 of the IBC regarding the appointment of Resolution Professional.
6. Justification for replacing the IRP and appointing a new RP.
7. Consideration of reasonable fees for Insolvency Professionals.

Analysis:
1. The application was filed under Section 22(3)(b) of the IBC seeking the appointment of a new Resolution Professional for the Corporate Debtor. The CoC disagreed with the professional fee quoted by the IRP, leading to the need for a new RP.

2. The IRP initially proposed a professional fee of ?5,00,000 per month, which was deemed high by the CoC. Subsequently, a new RP, Mr. K Parameswaran Nair, was appointed with a monthly fee of ?2,50,000 plus applicable taxes, following an e-voting process where 68.47% of CoC members voted in favor of his appointment.

3. The Tribunal reviewed the minutes of the CoC meetings and the written consent of Mr. K Parameswaran Nair, ensuring compliance with IBBI regulations and the CoC's resolution for the RP appointment.

4. Section 22 of the IBC outlines the process for appointing a Resolution Professional, emphasizing the importance of CoC approval and written consent from the proposed RP. The Tribunal highlighted the relevant legal provisions in its analysis.

5. The IRP's request for a high fee was a key factor in the decision to appoint a new RP. The Tribunal noted that the CIR Process should not lead to excessive payments to IRPs or RPs, emphasizing the need for reasonable fees.

6. The IRP's health condition and the CoC's dissatisfaction with the fee proposal were cited as reasons for the RP replacement. The Tribunal acknowledged the CoC's decision and appointed Mr. K Parameswaran Nair as the new RP.

7. To address fee disputes and ensure fair compensation for Insolvency Professionals, the Tribunal directed the matter to the IBBI for appropriate steps in deciding fees for IRPs, RPs, and Liquidators. This step aimed to standardize and regulate professional fees in insolvency proceedings.

This detailed analysis of the judgment showcases the legal intricacies involved in the appointment of Resolution Professionals under the IBC, emphasizing the importance of fee considerations, regulatory compliance, and fair compensation for Insolvency Professionals.