Appellate Tribunal clarifies Resolution Professional fee determination process in insolvency cases

The Appellate Tribunal directed the Adjudicating Authority to determine the fee of the Resolution Professional and the cost of the Corporate Insolvency Resolution Process to be borne by the Financial Creditor. The Adjudicating Authority approved a consolidated fee of Rs. 5 Lakhs + GST for the Resolution Professional, considering the work duration and expenses incurred. The Tribunal dismissed the appeal, emphasizing that fee fixation is not solely at the discretion of the Committee of Creditors but should be based on the professional's work and expenses. This decision clarifies the process of determining fees for Resolution Professionals in insolvency cases.

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Issues:
1. Determination of fee for Resolution Professional and cost of Corporate Insolvency Resolution Process.
2. Adequacy of fee determined by the Adjudicating Authority.
3. Comparison with previous judgments regarding fee determination.
4. Role of Committee of Creditors in fee fixation.

Analysis:
1. The Appellate Tribunal directed the Adjudicating Authority to decide the fee of the Resolution Professional and the cost of the Corporate Insolvency Resolution Process to be borne by the Financial Creditor, Bank of India Ltd. The Adjudicating Authority allowed all expenses incurred by the Resolution Professional and directed the payment of a consolidated amount of Rs. 5 Lakhs + GST towards the fee of the Resolution Professional.

2. The Appellant's counsel argued that the fee determined was inadequate, citing previous judgments where the fee was left to the commercial wisdom of the Committee of Creditors. However, the Resolution Professional had worked for three months, all expenses were allowed, and a consolidated fee of Rs. 5 Lakhs + GST was approved for the entire period. The Tribunal found this fee reasonable and not subject to the commercial wisdom of the Committee of Creditors.

3. The Tribunal emphasized that the fixation of the fee is not a business decision dependent on the commercial wisdom of the Committee of Creditors. In this case, the fee determination was considered appropriate based on the Resolution Professional's work duration and the expenses incurred. The appeal was dismissed as lacking merit, with no additional costs imposed.

4. The judgment highlights the distinction between fee determination for Resolution Professionals and the role of the Committee of Creditors in such decisions. While previous judgments may have left the fee to the Committee's discretion, in this instance, the Tribunal found the determined fee to be reasonable and not requiring further intervention. This decision underscores the importance of evaluating each case's specific circumstances when determining the Resolution Professional's fee in insolvency proceedings.

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