Government department must pay fees and costs under IBC and NCLT Rules; circular argument rejected.

The Tribunal held that the Appellant, a government department, is not exempt from paying IRP fees and CIRP costs under the IBC and NCLT Rules. The Appellant's argument based on a circular was rejected, emphasizing the comprehensive nature of the IBC prevailing over other laws. The Adjudicating Authority's directive for the Resolution Professional to proceed with CIRP and recover costs was deemed justified, with the Tribunal dismissing the appeal and upholding the Impugned Order without costs.

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Issues:
1. Whether the Appellant is exempt from paying IRP fees and CIRP costs.
2. Whether the Adjudicating Authority erred in directing the Resolution Professional to proceed with CIRP and recover CIRP costs.

Analysis:

Issue 1: Appellant's Exemption from IRP Fees and CIRP Costs

The Appellant argued that Rule 112 of NCLT Rules, 2016 exempts government departments from paying fees, thus contending that CIRP costs cannot be collected from them. However, the Tribunal clarified that Rule 112 pertains to fees for petitions, appeals, and applications before NCLT, not CIRP costs or IRP fees. The Tribunal highlighted that the IBC and NCLT Rules do not expressly exempt government departments from paying CIRP costs or IRP fees. The Tribunal also emphasized that the IBC is a comprehensive code, prevailing over other laws, as established by legal precedents. Therefore, the Appellant's argument based on the CBIC Master Circular was deemed untenable, and the Tribunal held that the Appellant must pay the IRP fees and CIRP costs.

Issue 2: Adjudicating Authority's Directive on CIRP Proceeding and Costs

The Adjudicating Authority had directed the Resolution Professional to proceed with CIRP and recover CIRP costs, which the Appellant contested. The Tribunal noted that the Resolution Professional had diligently performed duties under the IBC since the initiation of CIRP. The CoC was formed with operational creditors due to the absence of financial creditors, following the IBC procedures. The Appellant had expressed reluctance to participate in the CIRP process and even sought withdrawal, which was put to vote but did not meet the required threshold. The Resolution Professional sought directions twice from the Adjudicating Authority for a smooth CIRP process. The Tribunal concluded that the Adjudicating Authority's decision to proceed with CIRP and direct CoC to pay CIRP costs was justified and did not contain any flaws. Therefore, the Tribunal dismissed the appeal, finding no merit in the Appellant's arguments.

In conclusion, the Tribunal upheld the Adjudicating Authority's decision, emphasizing the applicability of IBC provisions over other laws and rejecting the Appellant's claims for exemption from IRP fees and CIRP costs. The Tribunal found no grounds to interfere with the Impugned Order, resulting in the dismissal of the appeal without costs.

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