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TMI Blog2021 (11) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 26.06.2019 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai in MA 55/2019 & MA 802/2019 in C.P. (IB)- 1319/(MB)/2017. The brief facts and sequence of events which are necessary to be noted for deciding this Appeal are:- A Company Petition under Section 9 of the Code was filed by 'Elecon Engineering Co. Ltd.' seeking to set in motion the Corporate Insolvency Resolution Process ('CIRP' for short) against 'Enviro Bulkk Handling System Pvt. Ltd.' (Corporate Debtor). The Adjudicating Authority by order dated 04.12.2017 admitted the petition. By subsequent order dated 18.06.2018 passed by the Adjudicating Authority, the Respondent- 'Rajmal Labhchand Mogra' was appointed as Interim Resolution Professional. The Respondent issued public announcement in local newspaper dated 26.06.2018. The first meeting of the Committee of Creditors ("CoC" for short) was held on 16.07.2018. One of the agendas of the meeting was to confirm and approve the appointment of Respondent as a Resolution Professional. The CoC was formed comprising of 'Invent Assets Securitisation and Reconstruction Pvt. Ltd.' with 72.56% and 'Saraswat Co-operative Bank Ltd.' with 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being MA 974/2018 seeking directions against the CoC's members to co-operate with Respondent for holding a meeting. The Adjudicating Authority passed an order on 09.10.2018 allowing MA 988/2018 by replacing Interim Resolution Professional-'Rajmal Labhchand Mogra' by appointing Shri Vipul K Choksi as Resolution Professional. The order further noted that the CoC with 100% voting rights approved the change of Interim Resolution Professional. The Application MA 974/2018 filed by the Interim Resolution Professional was dismissed as infructuous. In order dated 09.10.2018, the Adjudicating Authority has also directed the CoC to make the payment of the Interim Resolution Professional for the work conducted by him. In pursuance of the order dated 09.10.2018, vide notice dated 29.10.2018, the Respondent through its Advocate requested for clearing the total CIRP costs. In response to letter dated 09.10.2018, the Appellant forwarded a cheque dated 10.12.2018 for an amount of Rs. 5,40,000/- for the work conducted by the Respondent during the CIRP. The cheque was returned by the Respondent and thereafter an Application has been filed before the Adjudicating Authority. MA 802/2019 filed by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itlement to receive any emoluments by the Respondent. 5. Learned Counsel for the Respondent refuting the submissions of the Appellant contends that the CoC in its meeting dated 16.07.2018 has specifically approved the fee of Rupees Five Lakh per month as fee of the Interim Resolution Professional. Hence, the Respondent is entitled to claim the fee with the said rate till 09.10.2018 when Adjudicating Authority decided to replace the Interim Resolution Professional. The Respondent was willing to carry on the work and he has also filed an Application but due to the fact that he was obstructed in his working by the Appellant, it cannot be reason for denying his fee. It was submitted that as per Regulation 17(3) of the CIRP Regulations, 2016, where the appointment of Resolution Professional is delayed, the Interim Resolution Professional is entitled to perform the functions of the Resolution Professional from the fortieth day of the insolvency commencement date till a Resolution Professional is appointed under Section 22. The Resolution Professional having been appointed under Section 22 only on 09.10.2018, the appointment of Interim Resolution Professional was to continue till 09.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even days of the constitution of the committee of creditors. (2) The committee of creditors, may, in the first meeting, by a majority vote of not less than [sixty-six] per cent. of the voting share of the financial creditors, either resolve to appoint the interim resolution professional as a resolution professional or to replace the interim resolution professional by another resolution professional. (3) Where the committee of creditors resolves under sub-section (2)- (a) to continue the interim resolution professional as resolution professional [subject to a written consent from the interim resolution professional in the specified form], it shall communicate its decision to the interim resolution professional, the corporate debtor and the Adjudicating Authority; or (b) to replace the interim resolution professional, it shall file an application before the Adjudicating Authority for the appointment of the proposed resolution professional [along with a written consent from the proposed resolution professional in the specified form]. (4) The Adjudicating Authority shall forward the name of the resolution professional proposed under clause (b) of sub-section (3) to the Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statutory scheme. 11. In the light of the above, now we come to Regulation 17 on which reliance has been placed by the learned Counsel for the Respondent. Regulation 17 is as follows:- "17. Constitution of committee.- (1) The interim resolution professional shall file a report certifying constitution of the committee to the Adjudicating Authority within two days of the verification of claims received under sub-regulation (1) of regulation 12. (2) The interim resolution professional shall hold the first meeting of the committee within seven days of filing the report under this regulation. (3) Where the appointment of resolution professional is delayed, the interim resolution professional shall perform the functions of the resolution professional from the fortieth day of the insolvency commencement date till a resolution professional is appointed under section 22." 12. Sub-regulation (3) of Regulation 17 provides that when appointment of the Interim Resolution Professional is delayed, the Interim Resolution Professional shall perform the functions of the Resolution Professional from the fortieth day of the insolvency commencement date till a Resolution Professional is appoi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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