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TMI Blog2019 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... Fast Track Corporate Insolvency Resolution Process' also determining the 'Corporate Insolvency Resolution Process fee' and the 'cost' incurred and payable to Appellant (Sanjay Kumar Ruia) to the tune of Rs. 23,69,064/- plus G.S.T. 2. Learned Counsel appearing on behalf of Sanjay Kumar Ruia, erstwhile 'Resolution Professional' of 'S.N. Plumbing Private Limited', submits that the 'Resolution Professional' has incurred expenditure against different heads and submitted professional bill totaling Rs. 1,45,92,064/- which was also approved by the 'Committee of Creditors'. Thereafter, the Adjudicating Authority while passing order under Section 55, without any basis, reduced the amount to the tune of Rs. 23,69,064/- plus G.S.T., which is not permissible in law. 3. It is further submitted that after completion of 270 days of the 'Resolution Process', the 'Committee of Creditors' had no power to replace the 'Resolution Professional' and the Adjudicating Authority had no power to extend the period beyond 270 days. 4. Mr. Ilam Paribi, appearing on behalf 1st Respondent- 'Financial Creditor' and Ms. Amisha Agarwal, learned Counsel appearing on behalf of 2nd Respondent another 'Financial C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 'Corporate Debtors', namely: - (a) a corporate debtor with assets and income below a level as may be notified by the Central Government; or (b) a corporate debtor with such class of creditors or such amount of debt as may be notified by the Central Government; or (c) such other category of corporate persons as may be notified by the Central Government."" 9. Section 55 provides that application for 'Fast Track Corporate Insolvency Resolution Process' should be completed within a period of 90 days. 10. In the present case, the application was not filed under Section 55 but under Section 9 of the 'I&B Code'. In terms of Section 12 'Corporate Insolvency Resolution Process' was required to be completed within 180 days from the date of admission. Sub-section (3) of Section 12 empowers the Adjudicating Authority to extend the period beyond 180 days but it cannot exceed 90 days. The provision (Section 12) reads as follows: "12. Time-limit for completion of insolvency resolution process. - (1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating Authority exceeded its jurisdiction by extending the period of 90 days after completion of 270 days of the 'Corporate Insolvency Resolution Process' wrongly exercising its power under sub-section (2) of Section 55 which is not applicable. Accordingly, the Issue No.1 is answered in negative. Issue No.2 16. After completion of 270 days of 'Corporate Insolvency Resolution Process', the Adjudicating Authority can pass order under Section 31 of the 'I&B Code', if a 'Resolution Plan' has been approved by the 'Committee of Creditors'. In absence of any 'Resolution Plan', the Adjudicating Authority is bound to pass order under Section 33 by initiating liquidation proceeding against the 'Corporate Debtor'. 17. In the background of law as discussed above, we hold that after completion of 270 days, the 'Committee of Creditors' ceased to exist and thereby they have no jurisdiction to replace a 'Resolution Professional' under Section 22 of the 'I&B Code'. Even if the decision to replace the 'Resolution Professional' is taken prior to 270 days, in absence of any order passed by the Adjudicating Authority, such decision cannot be entertained on completion of 270 days. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors unless such resolution applicant is also a financial creditor. (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. 19. Chapter IX of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 deals with 'Insolvency Resolution Process'. Regulation 31 relates to 'Insolvency Resolution Process Cost'; Regulation 33 relates to 'Costs of the Interim Resolution Professional' and Regulation 34 deals with 'Resolution Professional Costs', as under: "31. Insolvency resolution process costs - Insolvency resolution process costs under section 5(13)(e) shall mean- (a) amounts due to suppliers of essential goods and services under Regulation 32; (b) amounts due to a person whose rights re prejudicially affected on account of the moratorium imposed under section 14(1)(d); (c) expenses incurred on or by the interim resolution professional to the extent ratified under regulation 33; (d) expenses incurred on or by the resolution professional fixed under regulation 34; and (e) other costs directly relating to the corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as under: "38. Mandatory contents of the resolution plan - (1) A resolution plan shall identify specific sources of funds that will be used to pay the - (a) insolvency resolution process costs and provide that the insolvency resolution process costs will be paid in priority to any other creditor; (b) liquidation value due to operational creditors and provide for such payment in priority to any financial creditor which shall in any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and (c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan. (2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; (b) the management and control of the business of the corporate debtor during its term; and (c) adequate means for supervising its implementation." 22. On combined reading of Section 30 of the 'I&B Code' with Regulations 31, 34 & 38, it is clear that the 'Committee of Creditors' is required to determine the reso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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