Appeals dismissed, RP's fees reduced due to inactivity during Covid. Justified adverse remarks on conduct.

The appeals were dismissed, upholding the order to pay the Resolution Professional's (RP) fees from 01.09.2019 to 24.04.2022 as ratified by the Committee of Creditors (CoC). The RP's fees were reduced from Rs. 3.75 lakhs to Rs. 1 lakh per month due to inactivity during the Covid pandemic and lack of progress in the Corporate Insolvency Resolution Process. Adverse remarks on the RP's conduct, including hindering the process and prioritizing fees over completing the CIRP, were found justified.

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Issues Involved:
1. Payment of fees and expenses to the Resolution Professional (RP) till 24.04.2022.
2. Justification of reducing RP's fees to Rs. 1 lakh per month.
3. Adverse remarks on the professional conduct of the RP.

Summary:

Issue 1: Payment of Fees and Expenses to RP
The appeals were filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the order directing the Committee of Creditors (CoC) to pay the RP's fees from 01.09.2019 to 24.04.2022. The CoC had ratified the RP's fees of Rs. 3.75 lakhs per month plus GST in the first meeting. Despite deciding to replace the RP in the third meeting, the CoC did not file an application for his replacement, thus the RP continued in his role. The Adjudicating Authority held that the RP was entitled to claim fees and expenses as the CoC had allowed him to continue. Religare Finvest's contention of having consented to fees only till 31.08.2019 was deemed redundant since the CoC had ratified the fees and allowed the RP to continue until a replacement was appointed.

Issue 2: Justification of Reducing RP's Fees
The Adjudicating Authority reduced the RP's fees from Rs. 3.75 lakhs to Rs. 1 lakh per month plus GST, considering the period of inactivity due to the Covid pandemic and the RP's failure to make substantial progress in the Corporate Insolvency Resolution Process (CIRP). The RP's claim for full fees was not supported by precedents as the cited cases did not deal with fee reduction. The Authority found that the RP had failed to assist in the CIRP effectively, leading to a deadlock and eventual liquidation. The reduction in fees was considered reasonable and justified given the lack of substantial work and the Covid-19 disruptions.

Issue 3: Adverse Remarks on RP's Conduct
The RP's professional conduct was questioned due to several actions not in sync with the CoC's decisions, such as insisting on a forensic audit instead of a statutory audit and opposing liquidation despite filing for it. The RP's focus on claiming fees rather than completing the CIRP was noted. The Adjudicating Authority's remarks on the RP's conduct were deemed justified, as the RP's actions had impeded the CIRP process and caused harm to the Corporate Debtor.

Conclusion:
The appeals were dismissed, and the impugned order was upheld, affirming the reduction of the RP's fees and the adverse remarks on his professional conduct.

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