Case Note & Summary
The appeal was filed by CMA Harshad Deshpande, the Interim Resolution Professional (IRP) of M/s Shri Tradco Deesan Private Limited, challenging an order from the National Company Law Tribunal (NCLT) regarding the payment of his professional fees during the Corporate Insolvency Resolution Process (CIRP). The CIRP commenced on 15.02.2023 under Section 7 of the Insolvency and Bankruptcy Code, 2016, with the Appellant appointed as IRP. The Appellant's fees were contested by the Committee of Creditors (CoC), which ratified only partial fees for the period when the constitution of the CoC was stayed by the Appellate Tribunal. The Appellant argued that he was entitled to the full agreed fee of INR 2,50,000 per month, as he had performed significant duties despite the stay. The Respondents contended that the Appellant's role was limited during the stay, justifying the reduced fees. The Tribunal analyzed the interim order and the nature of work performed by the Appellant, ultimately determining that the limited work did not warrant full fees. The appeal was confined to the issue of fees for the stay period, and the Tribunal upheld the NCLT's decision to limit the fees to INR 50,000 per month for that duration.
Headnote
A) Insolvency Law - Fees of Interim Resolution Professional - Entitlement to Fees - Insolvency and Bankruptcy Code, 2016, Section 7 - The Appellant contended that he was entitled to full fees despite the stay on the constitution of the CoC, arguing that he performed substantial work during the stay period. The Tribunal held that the limited work performed did not entitle the Appellant to full fees at the same rate as during a fully operational CIRP (Paras 39-44).
Issue of Consideration
Whether the Appellant is entitled to full fees during the period when the constitution of the Committee of Creditors was stayed.
Final Decision
The Tribunal upheld the NCLT's order, limiting the Appellant's fees to INR 50,000 per month for the stay period from 28.02.2023 to 01.09.2023, finding that the limited work performed did not warrant full fees.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Interim Resolution Professional fees
- Committee of Creditors
- CIRP Regulations
- professional fees ratification
