2022 (10) TMI 701 - Tri - Insolvency and Bankruptcy

Seeking direction against the Liquidator to pay the fees of erstwhile Resolution Professional (for the period of 21.12.2018 to 12.02.2019) - direction to Liquidator to pay the amount to erstwhile Resolution Professional before any other amount to be distributed as per Section 53 of the I B Code, 2016 on priority basis. Whether the present application for the payment to the Resolution Professional for the period beyond what was expressly approved by the COC is maintainable? - Who will decide the fees, if any, due to applicant- erstwhile Resolution Professional as the COC has not been made a party to the application? HELD THAT - In the present case, in the absence of any order from this Adjudicating Authority appointing a liquidator, the applicant s continuation as a RP is not in contravention of any provisions of IBC - respondent s contention that no fees is payable for the extended period as the same was not ratified by the CoC is untenable. In view of the fact that in the present case, company is already under liquidation, the liquidator is directed to disburse the professional fee of RP at the rate approved by CoC for the period from 21.12.2018 to 12.02.2019 i.e, upto the period ending with order of liquidation. The said amount be disbursed to erstwhile Resolution Professional before any other amount to be distributed as per Section 53 of the I B Code, 2016 as the said fees comes under the heading under section 5(13) i.e., insolvency resolution process cost. The present application is allowed and disposed of accordingly.

Summary

Issues:
1) Whether the present application for payment to the Resolution Professional beyond the approved period by the COC is maintainable.
2) Who will decide the fees, if any, due to the applicant-erstwhile Resolution Professional as the COC has not been made a party to the application.

Detailed Analysis:
1) The Tribunal considered an application by the erstwhile Resolution Professional seeking direction against the Liquidator to pay fees for the period beyond the COC approval. The RP was appointed initially and later confirmed during CoC meetings. The RP managed the affairs until liquidation, seeking unpaid fees through various communications. The Liquidator argued the application was not maintainable as the COC was not made a party. However, the Tribunal referred to IBC provisions and a similar case to support the RP's claim. The Tribunal held that the RP's continuation was valid until a liquidator was appointed, and the fees were payable despite lack of CoC ratification.

2) The Tribunal referenced a case where the RP could not submit a claim before the CoC due to liquidation. In this scenario, the Tribunal empowered the Adjudicating Authority to determine the RP's fees. Considering the company was already under liquidation, the Tribunal directed the Liquidator to disburse the RP's professional fees from a specific period approved by the CoC. The fees were to be paid before any other distribution as per IBC Section 53, categorizing them as insolvency resolution process cost.

Therefore, the Tribunal allowed the application, directing the Liquidator to pay the RP's fees for the specified period before other distributions, as the fees were considered part of the insolvency resolution process cost.