Tribunal Reduces Excessive Interim Resolution Professional Fee

The Tribunal found the lump sum fee of Rs. 5 lakh directed by the Adjudicating Authority for the Interim Resolution Professional to be excessive and arbitrary. The fee was reduced to Rs. 1.75 lakh, with an additional Rs. 25,000 for travel expenses, based on the lack of expenses incurred and the circumstances. The Tribunal emphasized compliance with the Insolvency and Bankruptcy Code provisions for appointing and determining fees for the Interim Resolution Professional. The decision addressed the issues of excessive fee determination, interpretation of relevant provisions, and the appropriate fee payable, modifying the original order accordingly.

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Issues:
1. Excessive and arbitrary lump sum fee of Rs. 5 lakh directed by the Adjudicating Authority for the Interim Resolution Professional.
2. Interpretation of relevant provisions of the Insolvency and Bankruptcy Code, 2016.
3. Determination of the appropriate fee payable to the Interim Resolution Professional.

Analysis:

Issue 1:
The appeal was filed against the order directing the Corporate Debtor to pay a lump sum fee of Rs. 5 lakh to the Interim Resolution Professional for 27 days of work. The Corporate Debtor argued that the fee was excessive and arbitrary. The Interim Resolution Professional claimed a fee of Rs. 6.50 lakhs for 30 days, as agreed upon by the parties. The Tribunal analyzed the communication between the parties and found that the fee charged jointly by a firm and the Interim Resolution Professional was not towards the fee of the professional. Considering the lack of expenses incurred by the professional and the circumstances, the Tribunal held that the Rs. 5 lakh fee was excessive and reduced it to Rs. 1.75 lakh, along with an additional Rs. 25,000 for travel expenses.

Issue 2:
The Tribunal referred to Section 7(3)(b) of the Insolvency and Bankruptcy Code, which empowers a Financial Creditor to name the Resolution Professional proposed as the Interim Resolution Professional. The Tribunal highlighted the requirement for written consent from the proposed professional and the need for a certificate confirming their eligibility. The Tribunal emphasized the importance of following the regulations and forms prescribed under the Code for the appointment and functioning of the Interim Resolution Professional.

Issue 3:
The Tribunal examined the provisions of the Insolvency and Bankruptcy Code regarding the fixing of expenses for the Interim Resolution Professional. It noted that if the Applicant does not fix the expenses, the Adjudicating Authority is required to determine the fees. The Tribunal considered the lack of expenses incurred by the professional and the communication between the parties to arrive at a reasonable fee of Rs. 1.75 lakh for the professional's 27 days of work. The Tribunal modified the impugned order to reflect this revised fee amount.

In conclusion, the Tribunal addressed the issues of excessive fee determination, interpretation of relevant provisions, and the appropriate fee payable to the Interim Resolution Professional, providing detailed reasoning and modifying the original order accordingly.

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