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TMI Blog2022 (1) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... jan Raman, Resolution Professional Poonam Drums & Containers Pvt Ltd v Bank of India Ltd. 2. The issue in dispute relates to the payments of costs and expenses incurred by the Resolution Professional ("RP"). Pursuant to an email dated 4 February 2019 of the respondent, who was a financial creditor of Poonam Drums and Containers Private Limited (the Corporate Debtor), the appellant submitted his technical and financial bid on 5 February 2019 for appointment as an Interim Resolution Professional. On 8 March 2019, the respondent filed a petition under Section 7 of the Insolvency and Bankruptcy Code 2016 ("IBC") against the Corporate Debtor. On 20 September 2019, the Corporate Debtor was admitted to the insolvency resolution process by the Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication on 17 January 2020 for obtaining the release of the remaining fee and costs. The principal relief which was claimed was in the following terms: "1. That the Respondent Bank of India, be directed to make payment of the CIRP cost including fees of the Applicant Resolution Professional as per the details furnished in the Annexure D." 6. On 24 January 2020, the respondent replied to the appellant's letter dated 30 December 2019 stating that it had verified the details of the fee and costs stated by the appellant and found them in conformity with the technical and financial bid based on which he had been awarded the assignment, together with the approval of the Committee of Creditors ("CoC"). The respondent stated that it would rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even noticed in the order. Copies of the minutes of meeting between the appellant and respondent financial creditor, and of the other documents evidencing their agreement as to the fee to be paid to the appellant, are annexed herewith and marked as Annexure - C (Collectively). Annexed as Annexure D is a statement showing the amount paid by the respondent to the appellant after the passing of the impugned order, which is a sum of Rs. 7,09, 154/-. An amount of Rs. 1,99,839/- therefore yet remains to be paid, and this is reflected in the said statement as well." 8. The NCLAT, while dismissing the appeal, observed that: (i) The appellant had worked for about three months as RP; (ii) The expenses had been allowed in full and the consolidate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction has (it is urged) been improperly exercised in the sense that there has been no application of mind to the basis of the claim and the figures which were accepted by the financial creditor. 11. On the other hand, Mr Vadlamani Seshagiri, counsel appearing on behalf of the respondent, submitted that the appellant accepted the order of the NCLAT dated 19 December 2019 remitting the proceedings back to the NCLT for determining the costs and fee payable to the RP. Moreover, it was sought to be urged that the payment which has been made to the RP is commensurate with the work which was done over a period of three months. 12. Responding to the above submissions, it has been urged on behalf of the appellant that the appellant did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of the amount which is payable to an expert valuer as an intrinsic part of the CIRP costs. Regulation 34 of the IRP Regulations defines "insolvency resolution process cost" to include the fees of other professionals appointed by the RP. Whether any work has been done as claimed and if so, the nature of the work done by the valuer is something which need not detain this Court, since it is purely a factual matter to be assessed by the adjudicating authority. 14. Regulation 34 of the the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 provides as follows : "34. Resolution professional costs.-The committee shall fix the expenses to be incurred on or by the resolution pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant have been considered. The adjudicating authority merely directed the respondent to pay the expenses incurred and an amount of Rs. 5,00,000 plus GST towards the fee of the RP. Neither the basis of the claim nor its reasonableness has been considered by the adjudicating authority. The appellate authority has merely proceeded in an ad hoc manner on the ground that the amount of Rs. 5,00,000 as fee, in addition to the expenses, appears to be reasonable. Both the orders suffer from an abdication in the exercise of jurisdiction. In the absence of any reasons either in the order of the NCLT or the appellate authority, it is impossible for the Court to deduce the basis on which the payment of an amount of Rs. 5,00,000 together with expenses has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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