Determination of insolvency resolution costs - payments of costs ...

Supreme Court Remands Case Due to Inadequate Evaluation of Insolvency Resolution Costs by NCLT and Appellate Authority.

January 8, 2022

Case Laws     Insolvency and Bankruptcy     SC

Determination of insolvency resolution costs - payments of costs and expenses incurred by the Resolution Professional (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 ₹ 5,00,000 as fee, in addition to the expenses, appears to be reasonable. - 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 ₹ 5,00,000 together with expenses has been found to be reasonable. Consequently, an order of remand becomes necessary. - SC

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