9911796707
TMI Blog2024 (4) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Impugned Order, the Adjudicating Authority has directed the Appellant- State Trading Corporation to make payment of Rs 33 lakhs as fees to the Interim Resolution Professional - Respondent No. 1 and reimbursement of Rs 9 lakhs as CIRP expenses. Aggrieved by this impugned order, the present appeal has been preferred by the Appellant. 2. The Learned Counsel for the Appellant giving the factual background stated that following the admission of M/s Spacevision Impex Pvt Ltd - Corporate Debtor into Corporate Insolvency Resolution Process ('CIRP' in short), the Interim Resolution Professional ('IRP' in short) was appointed to conduct the CIRP proceedings. Since, the CIRP proceedings could not be concluded, an application was filed before the Adjudicating Authority for liquidation of the Corporate Debtor which was allowed on 21.02.2022. Following the passing of the liquidation order, the IRP filed IA No. 1275 of 2022 seeking approval of IRP fees and CIRP expenses aggregating Rs.77,91,974/-. It was contended that the Adjudicating Authority in deciding the fees of Rs. 33 lakhs @ Rs.1 lakh per month for 33 months to be paid to the IRP committed a mistake as it was fixed on the higher s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming hefty fees. It was also submitted that the IRP to justify his fees has submitted a long list of 106 activities but most of these items indicated in the list are of trivial and mundane nature which deserves to be ignored. The IRP therefore deserves to be paid fees far less than Rs.1 lakh per month and for a period not exceeding 6 months. 5. The Learned Counsel for the IRP - Respondent No. 1 refuting the submissions made by the Appellant stated that the IRP had made best possible efforts to complete the CIRP process within the stipulated time. It was the indecision and non-cooperation on the part of the Appellant, who constituted the sole member of the CoC, which delayed the process of CIRP. Further it was not the fault of the IRP that inspite of publication of Form G, no Resolution plan had been received from any resolution applicant. The CoC was therefore left with no option but to move towards liquidation. It was added that the IRP has submitted a list of 106 activities performed by him since his appointment and emphatically asserted that all these activities were necessary, critical and unavoidable for conduct of CIRP. It was also pointed out that the IRP had attended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the CoC which delayed the process of CIRP. On the list of 106 activities performed by him since his appointment, it was emphatically asserted that all these activities were necessary, critical and unavoidable for conduct of CIRP. Moreover, it is submitted that they had attended 48 hearings before the Adjudicating Authority; 13 hearings before this Tribunal and once before the Hon'ble Supreme Court. 9. To come to our findings, we have gone through the minutes of the three CoC meetings. We notice that during each of the CoC meetings, the IRP had meticulously listed out the entire gamut of activities carried out by him for the smooth conduct of CIRP. In the 1st CoC meeting at Agenda item 4, the IRP had explained in details to the CoC of the steps taken by the IRP which included public announcements in the newspapers; communications entered into with the suspended management; visits undertaken to the office of the Corporate Debtor; collection, verification and filing of documents with Registrar of Companies; verification of claims received; constitution of CoC and filing of status reports with the Adjudicating Authority. This finds place at pages 72-74 of Appeal Paper Book ('APB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meetings were attended by the Authorised Representatives of the Appellant. However, when we analyse the decision-making process therein, it is noticed that that there were clear signs of lethargy and tendency on the part of the Appellant to defer decisions. Coming to the subject matter of ratification of CIRP expenses incurred by the IRP and appointment of legal counsel; to approve fees to be paid to the IRP @ Rs. 2 lakhs per month and appointment of Resolution Professional and to fix his fees, we find that this had figured in the agenda for discussion in the first CoC meeting itself but remained inconclusive since the Appellant had informed that they would convey the approval only after securing internal approval from their competent authority. The same paralysis in decision-making continued in the second CoC meeting wherein though the extension of the 90 days of the CIRP of the Corporate Debtor was agreed to by the CoC, on the issue of IRP fees and CIRP expenses it was informed that they would convey the approval within 15 days after securing internal approval from their competent authority. When we come to the subject matter of initiation of liquidation, it is again noticed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities. However, the CoC minutes show that the Appellant did not approve these resolutions and the Authorised Representative each time informed that they will convey the approval after getting internal approval from their competent authority. In such circumstances, it was clearly the Appellant which had been delaying the CIRP process by deferring to take decisions in the CoC meetings on the ground that approval of higher authorities was required. We are therefore persuaded to hold that there is substance in the contention of the IRP that the Appellant displayed non-responsive behaviour and lackadaisical approach in the CoC meetings inspite of being the sole CoC member. 14. This now brings us to the question of how the Adjudicating Authority has determined the IRP fees and CIRP expenses. The relevant findings from the impugned order is as reproduced below : "It has been admitted by the Appellant that the Liquidator- Respondent No. 3 has made a provision for Rs. 42 lakhs as provisional CIRP cost subject to the outcome of this appeal. In the reply filed by State Trading Corporation of India Limited in Para No.13, the State Trading Corporation of India Limited has submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
