Financial Creditor to Cover CIRP Costs, IRP Expenses Excluded

The Tribunal directed the Financial Creditor (FC) to bear the Corporate Insolvency Resolution Process (CIRP) costs, excluding the Interim Resolution Professional's (IRP) fees. The IRP was instructed to detail his expenses and compliance with NCLAT's directions. The FC was given the opportunity to provide additional submissions. The matter was adjourned for parties to submit the Supreme Court's order and clarify their stance on pursuing applications under Section 7 of the IBC. Emphasis was placed on timely resolution of insolvency cases, with the next hearing set for 07.04.2021.

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Issues Involved:
1. Payment of fees to the Interim Resolution Professional (IRP).
2. Status and dismissal of the Corporate Insolvency Resolution Process (CIRP).
3. Compliance with the orders of the Hon'ble NCLAT and the Hon'ble Supreme Court.
4. Clarification of the stand of the Financial Creditor (FC) and the Corporate Debtor (CD) regarding the application under Section 7 of the IBC.
5. Reimbursement of CIRP costs.

Detailed Analysis:

1. Payment of Fees to the IRP:
The IRP, Mr. Anil Agarwal, sought the Tribunal to direct the respondents to pay his CIRP costs amounting to Rs. 17,81,160. The IRP had taken over the management of the Corporate Debtor (CD) but handed it back to the suspended management following the NCLAT's order dated 18.06.2020. The IRP claimed he continued performing his duties despite the stay by the NCLAT on constituting the Committee of Creditors (CoC). The Tribunal directed the FC and the IRP to settle the matter of IRP fees before the next hearing, emphasizing that there was no formal agreement regarding the IRP's fees, which is not acceptable in IBC proceedings where time is crucial.

2. Status and Dismissal of the CIRP:
The CIRP was initiated against three companies based on applications filed by Punjab National Bank under Section 7 of the IBC. The NCLAT had set aside the admission order of the NCLT and remanded the matter back for fresh adjudication, providing an opportunity for the parties to consider the renewal of the One-Time Settlement (OTS). The IRP filed an application to dismiss the CIRP and sought reimbursement of his costs, stating that the CIRP should be considered dismissed following the NCLAT's order.

3. Compliance with Orders of the NCLAT and Supreme Court:
The NCLAT's final order dated 18.06.2020 set aside the NCLT's admission order and remanded the matter back for fresh consideration. The Tribunal noted that despite the NCLAT's order, the IRP continued performing his duties but did not constitute the CoC. The FC filed an SLP before the Supreme Court against the NCLAT's order, and the matter was pending without a fixed hearing date. The Tribunal emphasized the need for clarity on the outcome of the writ filed before the High Court and the SLP filed before the Supreme Court before passing any order in the IRP's application.

4. Clarification of the Stand of FC and CD:
The Tribunal directed senior officials of the FC and the main promoter director/suspended management of the CD to be present in person at the next hearing to clarify their stand on the application filed under Section 7 of the IBC, the CIRP of the CD, and the outcome of the writ and SLP. The Tribunal stressed the importance of disposing of the matter without further delay, given that significant time had already passed since the filing of the original applications.

5. Reimbursement of CIRP Costs:
The Tribunal ordered that the FC (Punjab National Bank) should bear the actual CIRP costs incurred between 23.08.2019 and 20.06.2020, excluding the IRP's fees. The IRP was directed to file an affidavit detailing his assignment, expenses, and compliance with the directions given by the NCLAT. The Tribunal also allowed the FC to file an additional reply or addendum as required.

Conclusion:
The Tribunal adjourned the matter, directing both the FC and the CDs to file the copy of the Supreme Court's order, if any, by the next hearing date. The Tribunal emphasized the need for a clear stand from the FC on whether to pursue the applications under Section 7 of the IBC and highlighted the importance of adhering to the objectives of the IBC to ensure timely resolution of insolvency cases. The next hearing was scheduled for 07.04.2021.

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