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2022 (11) TMI 165 - AT - Insolvency and BankruptcyDirection for payment of Rs. 15,00,000/- as a consolidated fee to the Resolution Professional for the entire CIRP period - HELD THAT - In view of the resolution in its fifth meeting of Committee of Creditors held on 23rd September, 2020 whereby the Committee of Creditors approved the fees of Resolution Professional at the rate of Rs. 2.50 lacs per month with a maximum of Rs. 15 lacs, the Adjudicating Authority has rightly considered all these facts and also recommendation of the Committee of Creditors. The instant Appeal is hereby dismissed devoid of merit.
Issues:
1. Dispute over payment of fees to Resolution Professional in a Corporate Insolvency Resolution Process (CIRP). 2. Appellant's inability to pay the full amount due to financial constraints. 3. CoC's decision on Resolution Professional's fees. 4. CoC members' compliance with fee payment. 5. Legal implications of non-payment of fees to Resolution Professional. Analysis: 1. The appeal was filed against an order directing the Appellant to pay Rs. 15,00,000/- as fees to the Resolution Professional for the entire CIRP period. The Appellant, a financial corporation, argued financial difficulties due to the Corporate Debtor's default of Rs. 20,64,81594.41. The Appellant proposed to pay Rs. 5,55,075/- towards the fees from liquidation proceeds. The Respondent, the Resolution Professional, claimed entitlement to higher fees but limited the request to Rs. 15 Lakhs. The CoC approved the Resolution Professional's fees at Rs. 2.50 lacs per month with a maximum of Rs. 15 lacs. 2. The Appellant contended that the Resolution Professional's plan was impractical, leading to the unit's liquidation. The Appellant's voting share was 74.01%, equating to a payment of Rs. 11,10,150/-. The Respondent highlighted the CoC's non-appearance during the fee dispute hearing, emphasizing the Resolution Professional's unpaid fees throughout the CIRP. The Respondent cited a previous order dismissing a similar appeal due to frivolous CoC claims about high fees. 3. The Adjudicating Authority upheld the CoC's decision on the Resolution Professional's fees, considering the CoC's approval in a prior meeting. The Adjudicating Authority affirmed the order directing the Appellant to pay Rs. 15,00,000/- as fees. The Tribunal found merit in the Adjudicating Authority's reasoning and dismissed the appeal, upholding the impugned order. The judgment emphasized the importance of honoring CoC decisions and ensuring fair compensation for the Resolution Professional in insolvency proceedings. 4. The Tribunal's decision highlighted the CoC's responsibility to approve and pay the Resolution Professional's fees, emphasizing the need for all CoC members, including the Appellant, to comply with fee obligations. The judgment underscored the legal significance of fee payment in insolvency processes, ensuring the Resolution Professional's fair compensation for their services. The Tribunal's findings aligned with the principles of corporate insolvency resolution and the Code's provisions regarding fee payments in CIRP. 5. The judgment's conclusion affirmed the Adjudicating Authority's order, emphasizing the CoC's role in fee approval and payment processes. The Tribunal's decision provided clarity on the legal obligations concerning Resolution Professional fees in insolvency proceedings, reinforcing the importance of upholding CoC decisions and ensuring proper compensation for professionals involved in CIRP. The judgment's comprehensive analysis addressed the financial, procedural, and legal aspects of the fee dispute, contributing to the jurisprudence on insolvency resolution processes.
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