Case Note & Summary
The dispute arose from an appeal filed by the Committee of Creditors (CoC) of P.M. Cold Storage Pvt. Ltd. against an order of the NCLT, Kolkata Bench, dated 17.10.2024, which directed the payment of CIRP costs to the erstwhile resolution professional, Mr. Bimal Kanti Choudhary. The CoC challenged this order, asserting that the NCLT had exceeded its jurisdiction under Section 27 of the Insolvency and Bankruptcy Code, 2016, as the application I.A.(IBC) No. 1758/KB/2024 did not pertain to the payment of fees or costs. The court noted that Section 27 specifically dealt with the replacement of resolution professionals and did not encompass issues related to payment of dues. The NCLT's order was criticized for not addressing the core issues and for including irrelevant citations without considering the factual context. The appellate tribunal concluded that the NCLT's direction for payment of CIRP costs was beyond its jurisdiction and quashed the order, allowing the appeal. However, it clarified that the erstwhile resolution professional retained the right to pursue independent claims for payment under the law. The tribunal's decision emphasized the importance of adhering to the statutory framework and the limitations of the NCLT's authority in such matters.
Headnote
A) Insolvency Law - Replacement of Resolution Professional - Jurisdiction of NCLT - Section 27 of the Insolvency and Bankruptcy Code, 2016 - The NCLT exceeded its jurisdiction by directing payment of CIRP costs, which was not claimed in the application under Section 27. The court held that the relief sought was beyond the scope of the application and not relevant to the issues under consideration (Paras 4-10).
Issue of Consideration
Whether the NCLT had jurisdiction to direct payment of CIRP costs under Section 27 of the I&B Code, 2016.
Final Decision
The appellate tribunal allowed the appeal and set aside the NCLT's order dated 17.10.2024, quashing the direction for payment of CIRP costs as it was beyond the jurisdiction of the NCLT and not relevant to the application under Section 27.
Law Points
- Interpretation of statutory provisions
- replacement of resolution professional
- jurisdiction of NCLT
- payment of CIRP costs
