Case Note & Summary
The appeal was filed by the erstwhile Interim Resolution Professional (IRP) of International Trenching Private Limited against an order of the National Company Law Tribunal (NCLT) dated 10.12.2024. The NCLT had dismissed the IRP's application for payment of ₹ 29,23,308 towards CIRP costs, instead directing the Committee of Creditors (CoC) to pay ₹ 3,00,000 as remuneration for the entire period of the IRP's service. The IRP contended that he was entitled to a monthly remuneration of ₹ 1,50,000, arguing that the CoC's later interpretation of the remuneration as a lump-sum payment was arbitrary and inconsistent with earlier approvals. The CoC, however, maintained that the remuneration was fixed based on its commercial wisdom, which is non-justiciable. The court analyzed the statutory provisions under the Insolvency and Bankruptcy Code, 2016, and concluded that the CoC's decision was valid and should not be interfered with. The appeal was ultimately dismissed, affirming the CoC's authority to determine the remuneration of the IRP.
Headnote
A) Insolvency Law - Remuneration of Interim Resolution Professional - Commercial Wisdom of CoC - The Adjudicating Authority upheld the decision of the Committee of Creditors to fix the remuneration of the Interim Resolution Professional at ₹ 3,00,000 for the entire tenure, emphasizing that the commercial wisdom of the CoC is non-justiciable and cannot be interfered with by the Adjudicating Authority. The court held that the CoC's decision was within its jurisdiction and aligned with the statutory framework of the Insolvency and Bankruptcy Code, 2016 (Paras 1-3).
Issue of Consideration
Whether the Adjudicating Authority erred in upholding the remuneration fixed by the Committee of Creditors for the Interim Resolution Professional.
Final Decision
The appeal was dismissed, affirming the decision of the National Company Law Tribunal regarding the remuneration of ₹ 3,00,000 for the entire tenure of the Appellant as Interim Resolution Professional, but noting that the reliance on the K. Sashidhar judgment was misplaced.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Companies Act
- 2013
- commercial wisdom of CoC
- remuneration of IRP
- non-justiciability of CoC decisions
Case Details
2026 LawText (NCLAT) (06) 38
Company Appeal (AT) (Insolvency) No. 430 of 2025
Mr. Nilotpal Shyam, Ms. Shivali, Mr. Tejas Mishra, Mohd. Nazim Khan, Ms. Niti Jain, Nitai Agarwal, Ms. Shivani Chawla, Mr. Sanjay Kumar
HDFC Bank Limited, Mr. Amrit Pal Bedi, Blueplanet Infradevelopers Private Limited, Indusind Bank Limited, Deutsche Bank, Dewan Housing Finance Corporation Limited, International Trenching Private Limited
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Nature of Litigation
Appeal against the order of the National Company Law Tribunal regarding remuneration of the Interim Resolution Professional.
Remedy Sought
The Appellant sought payment of ₹ 29,23,308 and punishment for CoC members under the Contempt of Courts Act.
Filing Reason
The Appellant filed the application for payment of CIRP costs and remuneration.
Previous Decisions
The NCLT had previously directed the CoC to pay ₹ 3,00,000 as remuneration to the Appellant.
Issues
Whether the Adjudicating Authority erred in upholding the remuneration fixed by the Committee of Creditors for the Interim Resolution Professional.
Submissions/Arguments
The Appellant argued that the CoC's interpretation of remuneration as a lump-sum payment was arbitrary and inconsistent with earlier approvals.
The Respondents contended that the CoC's decision was a commercial decision that is non-justiciable and should not be interfered with.
Ratio Decidendi
The commercial wisdom of the Committee of Creditors is non-justiciable and cannot be interfered with by the Adjudicating Authority; remuneration of the IRP is determined by the CoC's decisions.
Judgment Excerpts
The commercial wisdom of CoC is given paramount status.
This Adjudicating Authority does not have the jurisdiction or authority to analyze or evaluate the commercial decisions of the CoC.
The CoC, in its commercial wisdom, has decided and is willing to pay Rs. 3,00,000 to the Applicant as remuneration.
Procedural History
The appeal arose from an order of the NCLT dated 10.12.2024, which was issued in response to IA No. 343 of 2021 filed by the Appellant regarding CIRP costs.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 5(13), Section 16(5), Section 22(3), Section 60(5)(b)
- Companies Act, 2013: Section 425
- Contempt of Courts Act, 1971: Section 12
