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TMI Blog2022 (8) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... solvency Resolution Process Cost and therefore in the instant matter the Liquidator cannot adjudicate upon the Insolvency Resolution Process Cost. Regulation 34 of the IBBI Regulations specifies that the CoC shall fix the expenses which are incurred by the Resolution Professional. The word expenses includes the fee to be paid to the Resolution Professional. Viewed from any angle, the fees of an RP cannot be considered to be a Claim as defined under Section 3(6) of the Code. The Liquidator can only verify and adjudicate the Claims as defined under the Code. Since the amount of fees payable to an RP is not a Claim , the same cannot be determined or verified by Liquidator. The Hon ble Supreme Court in Alok Kaushik [ 2021 (3) TMI 1242 - SUPREME COURT ] in para 20 has clearly distinguished the fees to be paid to a professional from the penalty which can be imposed if a disciplinary committee is satisfied that sufficient cause exists . The Hon ble Apex Court has observed that the availability of a grievance redressal mechanism under the Code against an Insolvency professional does not divest the Adjudicating Authority of its jurisdiction under Section 60(5)(e) of the Code to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he corporate debtor was ordered as recommended by the CoC. The Liquidation proceedings are in progress and are pending before the Liquidator. Any claim by anyone would be competent before the Liquidator and if any adverse decision is given by the Liquidator then the provisions for filing an appeal has been made. 2. For the sake of brevity, the facts of the case are not being detailed as the same has been submitted by both the parties. 3. Submissions of the Learned Sr. Counsel Mr. Sumant Batra appearing for the Appellant: It is submitted by the Learned Sr. Counsel that the Appellant served as an IRP of the Corporate Debtor for a period of 30 days commencing from 13.07.2017 and by virtue of the Order of the Learned Adjudicating Authority, the Appellant was appointed as the RP, which period of appointment continued from 13.07.2017 till her replacement on 07.06.2018, for a period totalling 10 months and 25 days. It is submitted that the appointment was made by the Adjudicating Authority and therefore the CoC was directed to decide the fees. It was only under the directions of the Adjudicating Authority that the Appellant discharged the functions as IRP and RP fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 13.02.2020 and the Appellant responded vide Reply dated 19.02.2020 and a Draft Inspection Report dated 31.07.2020 against the Appellant was issued, for which, the Appellant submitted her Reply on 14.08.2020 to the Draft Inspection Report. It is submitted by the Learned Counsel that the Liquidator does not have the power to decide the fees of the IRP and the RP or to sit in Appeal over the decision of the CoC. The Liquidator has the power to only verify the Claims of all the Creditors of the Corporate Debtor and that the Appellant is not a Creditor of the Corporate Debtor , the Appellant s Application for determination of her fee cannot be determined by the Liquidator. The fees of the Appellant can only be decided by the Adjudicating Authority as the Corporate Debtor is under Liquidation and the CoC is no longer existent. The CoC failed to comply with the direction diligently and also fixed the fee of the Appellant at an arbitrary rate. The CoC sought refund of Rs.24,12,875/- withdrawn by the Appellant during her tenure as IRP/RP and this amount also included Rs.12,42,875/- which is a fee of the Appellant and Rs.11,70,000/-, which is the fee paid to the advisor/p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l representing R-1 and R-3: During the pendency of the present Appeal, on a complaint filed by the Corporate Debtor through R-3 against the Appellant, the IBBI vide Order dated 14.03.2022 passed strictures against the Appellant and banned the Appellant from undertaking any assignment for a period of 1 year. The Appellant was not holding office in the capacity of IRP/RP for the entire period starting from 13.07.2017 to 07.06.2018. The Appellant was appointed as IRP vide Order dated 13.07.2017 passed by the Adjudicating Authority and was holding the office till 01.08.2017, on which date, this Appellate Tribunal set aside the invocation of CIRP. Thereafter her appointment was revived again vide Order dated 15.01.2018 and 22.01.2018 passed by this Appellate Tribunal. The period 01.08.2017 to 14.01.2018 was excluded from the CIRP period however, the Adjudicating Authority mentioned in their Order that the Appellant is entitled to the fee for the whole period including the period excluded from the CIRP. In view of the same, the CoC considered the said excluded period as part of her tenure for calculating her fees. Between the period 13.07.2017 to 14.01.2018, the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofessional is required to be fixed by CoC, failing which such decisions/determination is to be made by the Adjudicating Authority under the provisions of Section 60(5) of the Code read with Regulation 33(2) of the CIRP Regulation to fix the fees as payable to the RP. 6. The expression Insolvency Resolution Costs as defined under Section 5(13) of the Code, Regulation 31 of the IRP Regulations, Regulation 33 which provides for the cost of the IRP, Resolution Professional Cost as defined under Regulation 34, have been addressed to in great detail by the Hon ble Supreme Court in Alok Kaushik Vs. Mrs. Bhuvaneshwari Ramanathan Ors. , Civil Appeal No. 4065/2020, wherein the Hon ble Supreme Court has also addressed to the issue whether Regulation 34 of the IRP Regulation which defines Insolvency Resolution Process Cost and includes the fees of professionals and the RP is a matter to be decided by the Adjudicating Authority. Paragraphs 12 to 20 of the Order of the Hon ble Supreme Court is being reproduced as hereunder: 12. The expression insolvency resolution costs' has been defined in Section 5(13) of the IBC in the following terms: (13) insolvency resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation.- For the purposes of this regulation, expenses include the fee to be paid to the interim resolution professional, fee to be paid to insolvency professional entity, if any and fee to be paid to professionals, if any, and other expenses to be incurred by the interim resolution professional. 15. Resolution professional costs are defined in Regulation 34: 34. Resolution professional costs.- The committee shall fix the expenses to be incurred on or by the resolution professional and the expenses shall constitute insolvency resolution process costs. Explanation.- For the purposes of this regulation, expenses include the fee to be paid to the resolution professional, fee to be paid to insolvency professional entity, if any, and fee to be paid to professionals, if any, and other expenses to be incurred by the resolution professional. 16. Where an application for withdrawal is filed under Section 12A of the IBC, a provision has been made in Regulation 30A(7) in regard to the deposit of expenses. Regulation 30A (7) provides as follows: 30A. Withdrawal of application. (...] (7) Where the application is approved under sub-regulation (6), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the Corporate Debtor. However, in doing do, we issue a note of caution to the NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the Corporate Debtor. The nexus with the insolvency of the Corporate Debtor must exist. 19. Though the CIRP was set aside later, the claim of the appellant as registered valuer related to the period when he was discharging his functions as a registered valuer appointed as an incident of the CIRP. The NCLT would have been justified in exercising its jurisdiction under Section 60(5) (c) of the IBC and, in exercise of our jurisdiction under Article 142 of the Constitution, we accordingly order and direct that in a situation such as the present case, the Adjudicating Authority is sufficiently empowered under Section 60(5)(c) of the IBC to make a determination of the amount which is payable to an exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for a fee of Rs. 16,00,000/- per month. The Resolution Professional is directed to consider the fee of the applicant and take a reasonable/rational decision at the earliest. 9. At this juncture, this Tribunal is of the considered view that the question which mainly arises in this Appeal is whether the Liquidator is having the jurisdiction to decide the fee of the RP as the CoC is no longer in existence. By virtue of Section 5(13)(e) of the Code, the fees and expenses incurred by the Appellant comes under the ambit of Insolvency Resolution Process Cost and therefore in the instant matter we are of the view that the Liquidator cannot adjudicate upon the Insolvency Resolution Process Cost. Regulation 34 of the IBBI Regulations specifies that the CoC shall fix the expenses which are incurred by the Resolution Professional. The word expenses includes the fee to be paid to the Resolution Professional. Viewed from any angle, the fees of an RP cannot be considered to be a Claim as defined under Section 3(6) of the Code. The Liquidator can only verify and adjudicate the Claims as defined under the Code. Since the amount of fees payable to an RP is not a Claim , the same canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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