Interim Resolution Professional fees during a stayed CIRP must reflect actual work performed, not automatic full remuneration.

Professional fees of an Interim Resolution Professional during a judicially restricted CIRP must be assessed by reference to the actual functions performed. Where constitution of the Committee of Creditors and further insolvency steps were stayed, only limited duties such as collation and verification of claims could proceed, so Regulation 34B and Schedule II did not create an automatic entitlement to full remuneration. A reduced pro rata fee, fixed by the Adjudicating Authority on the basis of curtailed work and verified expenses, was treated as a reasonable fee determination. The claim for full monthly remuneration was therefore rejected.

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Issues: Whether the Interim Resolution Professional was entitled to full fees under Regulation 34B and Schedule II of the Insolvency Resolution Process for Corporate Persons Regulations, 2016 for the period during which constitution of the Committee of Creditors remained stayed, and whether the Adjudicating Authority was justified in awarding a reduced pro rata fee.

Analysis: The interim order dated 28.02.2023 restrained constitution of the Committee of Creditors and further steps in the corporate insolvency resolution process, except collation and verification of claims. The Appellant therefore performed only a limited function during the relevant period, while the usual statutory duties under Sections 18 and 20 of the Insolvency and Bankruptcy Code, 2016, including constitution of the Committee of Creditors and management of the corporate debtor as a going concern, could not proceed in the normal manner. Regulation 34B and Schedule II were held to govern professional fees, but not to confer an automatic right to full remuneration irrespective of the restricted nature of work actually performed. The Adjudicating Authority had balanced the fact of limited work performed against the curtailed CIRP framework and fixed a reasonable remuneration of Rs. 50,000 per month with reimbursement of verified expenses.

Conclusion: The claim for full fees at the rate of Rs. 2,00,000 or Rs. 2,50,000 per month was rejected, and the reduced remuneration fixed by the Adjudicating Authority was upheld.

Final Conclusion: The appeal failed because the fee payable for the stay period had to reflect the constrained scope of work performed during the restricted CIRP, and no appellate interference was warranted with the equitable fee determination.

Ratio Decidendi: Professional fees of an Interim Resolution Professional during a judicially restricted CIRP must be assessed with reference to the actual functions performed, and the minimum fee framework under the CIRP Regulations does not mandate full remuneration where substantial statutory duties were stayed or could not be carried out.

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