Tribunal upholds IRP's fees claim in CIRP process, reduces amount.

The Tribunal affirmed the Interim Resolution Professional's entitlement to claim fees and expenses incurred during the Corporate Insolvency Resolution Process, emphasizing the IRP's diligent efforts despite challenges. The Operational Creditor was obligated to bear these expenses as per CIRP regulations. The Tribunal scrutinized and rationalized the claimed fees, reducing them to a consolidated amount of Rs. 2,87,000/- plus GST. The IRP's compliance with statutory provisions and regulations was noted, leading to the decision that the fees were context-specific and reflective of the work done. The Operational Creditor was directed to pay the modified amount within one week.

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Issues Involved:
1. Entitlement of the Interim Resolution Professional (IRP) to claim fees and expenses incurred in the Corporate Insolvency Resolution Process (CIRP).
2. Obligation of the Operational Creditor to bear the fees/expenses of the IRP.
3. Reasonableness and transparency of the fees/expenses claimed by the IRP.
4. Compliance with statutory provisions and regulations under the Insolvency and Bankruptcy Code (IBC).

Detailed Analysis:

1. Entitlement of the IRP to Claim Fees and Expenses:
The primary issue was whether the IRP was entitled to claim fees and expenses incurred during the CIRP proceedings. The Tribunal noted that the IRP had issued a public announcement and sought requisite information from the suspended management but faced non-cooperation. Despite limited progress due to lack of information and claims, the IRP's efforts were acknowledged. The Tribunal emphasized that the IRP had taken steps such as visiting the office of the Corporate Debtor and seeking approval from the Registrar of Companies (RoC). The Tribunal concluded that the IRP had discharged his duties with due diligence and was entitled to claim his fees/expenses.

2. Obligation of the Operational Creditor to Bear Fees/Expenses:
The Tribunal referred to CIRP Regulation 33, which mandates that the applicant (Operational Creditor) shall bear the expenses incurred by the IRP. Given that the Operational Creditor had initiated the CIRP proceedings, it was incumbent upon them to pay for the CIRP expenses. The Tribunal rejected the Operational Creditor's claim that they were not obligated to reimburse the IRP, citing the statutory construct of the IBC.

3. Reasonableness and Transparency of Fees/Expenses:
The Tribunal scrutinized the reasonableness of the fees/expenses claimed by the IRP. The IRP had claimed a total of Rs. 5,62,000/-, which included IRP fees, public announcement costs, legal expenses, company secretary fees, and out-of-pocket expenses. The Tribunal noted that the IRP's duties were limited due to the Covid-19 lockdown and lack of cooperation from the creditors. Consequently, the Tribunal rationalized the fees, reducing the IRP fees from Rs. 4,00,000/- to Rs. 2,00,000/- and halving the other professional and miscellaneous costs. The Tribunal determined that a consolidated amount of Rs. 2,87,000/- plus GST was reasonable for the IRP's services.

4. Compliance with Statutory Provisions and Regulations:
The Tribunal examined the relevant provisions of the IBC, IBBI (Insolvency Professionals) Regulations, 2016, and CIRP Regulations, 2016. The Tribunal highlighted the importance of maintaining written contemporaneous records, transparency in charging fees, and ensuring that costs are reasonable. The Tribunal found that the IRP had complied with these requirements, despite the Operational Creditor's contention that the IRP had not provided detailed supporting bills. The Tribunal concluded that the IRP's fees were context-specific and reflected the work undertaken.

Conclusion:
The Tribunal upheld the IRP's entitlement to fees/expenses but modified the quantum to Rs. 2,87,000/- plus GST, to be paid by the Operational Creditor within one week. The appeal was disposed of with these observations, and no costs were awarded.

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