Tribunal orders Liquidator to pay Resolution Professional fees before other distributions The Tribunal allowed the application by the erstwhile Resolution Professional, directing the Liquidator to pay the RP's fees for the specified period ...
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Tribunal orders Liquidator to pay Resolution Professional fees before other distributions
The Tribunal allowed the application by the erstwhile Resolution Professional, directing the Liquidator to pay the RP's fees for the specified period before other distributions, as the fees were considered part of the insolvency resolution process cost. The Tribunal held that the RP's continuation was valid until a liquidator was appointed, and the fees were payable despite lack of CoC ratification. The Tribunal empowered the Adjudicating Authority to determine the RP's fees in cases where the CoC was not involved due to liquidation.
Issues: 1) Whether the present application for payment to the Resolution Professional beyond the approved period by the COC is maintainable. 2) Who will decide the fees, if any, due to the applicant-erstwhile Resolution Professional as the COC has not been made a party to the application.
Detailed Analysis: 1) The Tribunal considered an application by the erstwhile Resolution Professional seeking direction against the Liquidator to pay fees for the period beyond the COC approval. The RP was appointed initially and later confirmed during CoC meetings. The RP managed the affairs until liquidation, seeking unpaid fees through various communications. The Liquidator argued the application was not maintainable as the COC was not made a party. However, the Tribunal referred to IBC provisions and a similar case to support the RP's claim. The Tribunal held that the RP's continuation was valid until a liquidator was appointed, and the fees were payable despite lack of CoC ratification.
2) The Tribunal referenced a case where the RP could not submit a claim before the CoC due to liquidation. In this scenario, the Tribunal empowered the Adjudicating Authority to determine the RP's fees. Considering the company was already under liquidation, the Tribunal directed the Liquidator to disburse the RP's professional fees from a specific period approved by the CoC. The fees were to be paid before any other distribution as per IBC Section 53, categorizing them as insolvency resolution process cost.
Therefore, the Tribunal allowed the application, directing the Liquidator to pay the RP's fees for the specified period before other distributions, as the fees were considered part of the insolvency resolution process cost.
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