2024 (12) TMI 885 - AT - IBC

Entitlement of Interim Resolution Professional (IRP) to fees - whether he is only entitled to the amount, that was to be paid for the performance of his duties is Rs.4,00,000/- as a whole or Rs.4,00,000/- thereafter too for each subsequent 30 days till the new RP was appointed? - HELD THAT - By venturing into the observations which has been made by Learned NCLT in IA No.447/2020, wherein it had directed Respondent No.2 to pay a proportional share of Rs.4,00,000/-, the agreed fee which would be payable to the Appellant would be till the new RP has replaced him. Because from records till his date of replacement had worked as IRP, which is fact apparent from records. The fact to be noted is that, the new RP was appointed on 27.11.2020 as per order passed in IA No.562/2019. From the date of expiry of the first slab of 30 days of his appointment as IRP (i.e., on 05.10.2019) till the date of appointment of new RP (i..e, 27.10.2020) wherein it happens to be 53 days, the Appellant is shown to have worked as IRP and would entitled to receive the payment of Rs.4,00,000/- for each 30 days, and for the additional 53 days which amounts to Rs.6,49,290/-. The actual amount to be received by IRP is at the rate of Rs.4,00,000/- for each 30 days, which would be as determined above that is till 27.10.2020. The amount of Rs.6,49,290/- is directed to be paid to the Appellant within 30 days from the date of this Judgment - Appeal allowed in part.

Summary

Issues:
- Challenges to Impugned Orders in two Company Appeals
- Entitlement of Interim Resolution Professional (IRP) to fees
- Clarification sought on payment of fees to IRP

Analysis:

In the present judgment, two Company Appeals were filed challenging Impugned Orders issued by the National Company Law Tribunal, Bengaluru Bench. The appeals revolve around the entitlement of the Interim Resolution Professional (IRP) to fees for the period of his appointment. The Appellant, appointed as IRP in a Corporate Insolvency Resolution Process (CIRP), sought payment for his services rendered during his tenure. The Respondent No. 2, Canara Bank, was directed to pay the IRP his proportional share of the agreed fee until he was replaced by a new RP. The IRP contended that he should be compensated from the date of his appointment till the new RP was appointed. The Appellant filed a clarification application seeking a determination on the amount owed to him for his services.

The Appellant, in both appeals, was appointed as IRP in a CIRP initiated by Respondent No. 3. The terms of payment for the IRP were agreed upon in a letter dated 15.11.2018. The IRP diligently performed his duties, including collation of claims, convening CoC meetings, and facilitating the CIRP process. However, the Respondent No. 2, with a significant voting share in the CoC, decided to replace the IRP with a new RP. The IRP continued his duties until the new RP was appointed, as directed by the NCLT. The dispute arose regarding the payment of fees to the IRP for the period he served.

The Appellate Tribunal analyzed the facts and orders passed by the NCLT. It was observed that the IRP was entitled to the agreed fee for the period he served as IRP until the new RP took over. The Tribunal determined that the Respondent No. 2 should pay the IRP his fees for the entire duration he served as IRP, including the period from the expiry of the first 30 days of his appointment till the appointment of the new RP. The Appellant was directed to be paid the amount owed to him within 30 days from the date of the judgment.

In conclusion, the Company Appeals were partly allowed, and the pending Interlocutory Applications were disposed of. The judgment clarified the entitlement of the IRP to fees and directed the Respondent No. 2 to pay the Appellant the agreed amount for his services rendered during the CIRP process.