2024 (1) TMI 938 - AT - Insolvency and Bankruptcy

Violation of principles of natural justice - Failure to clear the fees and expenses of period IRP - Impugned Order passed issuing contempt notice and the explanation which was submitted in the Affidavit filed has not been adverted to - Wilful disobedience or the order - entitlement of fees of the IRP - HELD THAT - There is no denial that in pursuance of order dated 01.12.2022, Rs. 5 Lakh has not been deposited. The stand taken by the Appellant is that said amount is towards fee and expenses for the IRP and expenses are being regularly paid. He submits that appellant is always ready to pay the reasonable fees to the IRP and the Affidavit which was filed on 28th November, 2023, explanation has not been adverted to. Had the Adjudicating Authority adverted to the Affidavit filed by the Financial Creditor on 28th November, 2023, there would not have been any observation that there has been wilful disobedience of the Order. The ends of justice be served in setting aside the order dated 29th November, 2023 and remitting the matter to the Adjudicating Authority for hearing afresh considering the affidavit dated 28th November, 2023 filed by the Appellant and pass the order - appeal disposed off.

Summary

Issues involved:
The issues involved in the judgment are the condonation of delay in filing the appeal and the entitlement of fees of the Insolvency Resolution Professional (IRP).

Condonation of Delay:
The application was filed for condonation of an 11-day delay in filing the appeal. The grounds for delay were that the order was passed on 29th November, 2023, uploaded on 13th December, 2023, and the certified copy was received on 29th December, 2023. The sufficient cause for delay was shown in the affidavit. The delay was condoned after considering the grounds presented.

Entitlement of Fees of the IRP:
The appeal was filed against an order where contempt notice was issued against the Appellant and other directors for non-compliance with a previous order. The Corporate Insolvency Resolution Process (CIRP) commenced on 1st December, 2022, and various applications were filed during the process. The main contention was regarding the IRP's entitlement to fees. The Appellant argued that the IRP should not receive fees until a specific order is passed, although they were willing to pay reasonable fees. The Respondent argued that the IRP is entitled to fees until the order is passed, with a minimum fee requirement. The Adjudicating Authority had issued a contempt notice due to alleged wilful disobedience, but the Appellant claimed that the explanation in their affidavit was not considered. The judgment set aside the previous order and remitted the matter back to the Adjudicating Authority for a fresh hearing, considering the affidavit filed by the Appellant.

Separate Judgment by the Judges:
The judgment was delivered by a panel including Justice Ashok Bhushan as the Chairperson, Barun Mitra as Member (Technical), and Arun Baroka as Member (Technical). The decision was made after hearing the arguments from both parties and examining the record. The final decision disposed of the appeal and directed the Adjudicating Authority to make a final decision on the pending fee issue of the IRP after hearing both parties.