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TMI Blog2023 (8) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 ("IBC" in short) arises out of the common order dated 06.12.2022 (hereinafter referred to as "Impugned Order") passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench Court-III) in IA No.1312/2022 of CP(IB) No. 4065/MB/2018 wherein the Adjudicating Authority has directed the Committee of Creditors ("CoC" in short) for payment of fees to the Resolution Professional ("RP" in short) of Rs.1 lakh per month + GST from 01.09.2019 to 24.04.2022 along with other actual expenses incurred by him on production of bills. 2. The relevant facts which are necessary for deciding the two appeals are as follows: Section 7 application had been admitted against the Corporate Debtor on 25.04.2019 for initiation of Corporate Insolvency Resolution Process ("CIRP" in short). After collating claims of the creditors, the CoC was constituted on which Religare Finvest became a member. The Religare Finvest had 69.02% of voting share and was the majority Financial Creditor. In terms of voting share, the next largest Financial Creditor was Dena Bank with 29.34% vote share as recorded in minutes of first CoC meeting. Later, India Resurgence Arc Pvt Ltd became a member on 24.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst production of bills. Aggrieved by this impugned order both these appeals have been filed. Religare in CA(AT) Ins No.100/2023 has assailed the order on the ground that the Adjudicating Authority wrongly recorded their consent of having agreed to the payment of fees to the RP from 01.09.2019 to 24.04.2022. The RP has filed CA(AT) Ins No.104/2023 challenging the impugned order for having reduced their fees and for making disparaging remarks on his professional conduct. CA(AT) Ins No.100/2023 3. The Learned Counsel for the Appellant/Religare Finvest vehemently contended that it had never consented to payment of fees of the RP beyond 31.08.2019. It was submitted that when the RP had filed MA No.3399/2019 seeking payment of fees and expenses till 31.08.2019, the Appellant had agreed to the same so as not to prolong litigation. However, the consent was with the caveat of allowing fees and expenses only for the period till 31.08.2019. However, the Adjudicating Authority misconstrued that consent by recording in the present impugned order that the consent was till 24.04.2022. 4. Attention was adverted to the fact that in the impugned order, the Adjudicating Authority has correctl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assets of the Corporate Debtor for which purpose a person had also been appointed to supervise the assets. The RP has also contended that the impugned order contains certain deprecatory remarks about his professional conduct which deserves to be expunged. It has been vehemently contented that it was the conduct of Religare Finvest which was putting hindrances to the conduct of CIRP and pushing the Corporate Debtor into liquidation. 7. We have duly considered the arguments advanced by the respective Appellant in both the appeals and perused the records carefully. From the contentions raised by the concerned Appellants in their respective appeals, we find that the common thread is that they have both assailed the impugned order but by challenging it on different grounds and in doing so they have assumed adversarial position against each other. That being so, we will collectively take up both the appeals and for this purpose outline the issues which need our consideration. The first issue for our consideration is whether the RP's fee and expenses is payable till 24.04.2022, and if so, whether reduction of fees to Rs.1 lakh per month was justified and tenable. The second issue for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only for himself but also his team for the COVID period more so by creating a tussle between the COC and himself with regard to way forward of the CIRP process. This bench also observes that the RP having filed an application for liquidation orally opposed for passing an order of liquidation contending that the Corporate Debtor is viable for resolution. The major COC member is alleging that the RP has handed over interim custody of the Corporate Debtor to the members of the suspended board which is not denied by RP. This Bench has taken a very serious note about the conduct as well as the way of charging fee by RP without doing any work. 6. Therefore, for the aforesaid reasons, this bench is of the considered opinion that the RP is merely entitled for his fee of Rs. 1,00,000/-+GST per month from 01.09.2019 to 24.04.2022 as fairly agreed by M/s Relegere Finvest Ltd who is a major COC member along with actual expenses like valuation expenses etc. incurred by Resolution Professional for protecting the property against production of bills till the property is handed over to liquidator as certified by COC. The COC is also at liberty to approve any other expenses incurred by RP as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es along with actual expenses. 12. This brings us to the second related aspect as to whether the reduction of the fees from Rs. 3.75 lakhs to Rs 1 lakh plus GST by the Adjudicating Authority was reasonable or not. To analyse this matter, we need to first notice some important dates. In the fourth CoC meeting held on 26.08.2019, the CoC had already deliberated and decided to initiate liquidation proceedings as the CIRP was not making satisfactory progress. We also notice that the RP had filed MA No. 3668/2019 on 11.11.2019 before the Adjudicating Authority seeking liquidation of the Corporate Debtor which was allowed on 16.11.2022. From the above chronicling of dates, it can be safely inferred that by end of August 2019, the active CIRP proceedings had reached a dead end. 13. Present is a case where the Adjudicating Authority has scaled down the fees from Rs 3.75 lakhs to Rs 1 lakh plus GST which has been challenged by the RP. All that we need to see is whether the Adjudicating Authority had taken this decision arbitrarily or whether it was a reasoned and justified decision. 14. Stating his claim for payment of full fees, the Learned counsel for the RP has relied on the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority while considering the liquidation application filed vide MA 3668/2019 had been constrained to note of serious misunderstanding between the RP and the CoC causing a deadlock in the CIRP process leaving no option but for liquidation. Given the material on record and the facts and circumstances in the present matter, we are therefore inclined to agree with the finding of the Adjudicating Authority that the active CIRP period having expired with no substantial work to be taken up further and the Covid pandemic also having generally disrupted work, the scaling down of the fees to Rs 1 lakh was not discriminatory or unfair. The Adjudicating Authority was therefore well within its rights in exercising its wisdom in adjudicating on the reasonability quotient of fees payable to the RP. We find no error in the proportionate reduction of fees/expenses as carried out by the Adjudicating Authority as the rationalization has been done with proper application of mind. 17. Having answered the first issue, we now come to the next point for determination as to whether the deprecatory remarks on the professional conduct of the RP were appropriate or they deserve to be expunged. 18. It ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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