TaxTMI 
TaxTMI 
2022 (8) TMI 107
X X X X Extracts X X X X
X X X X Extracts X X X X
....Learned Adjudicating Authority (National Company Law Tribunal, New Delhi, Principal Bench), whereby the Adjudicating Authority disposed of CA-1357(PB)/2019 and directed the Appellant/RP to file her 'Claim' before the Liquidator as the 'Corporate Debtor' was under Liquidation. For ready reference, the Impugned Order is being reproduced as hereunder: "This is an application principally for fixing the fee for the applicant namely Ms. Reeta Gupta, Interim Resolution Professional. A further prayer has been made to set aside the letter dated 14.09.2018, 25.09.2018 & 01 10.2018 and directing the CoC to pay for the period of appointment from 15.01.2018 to 11.06.2018. It is not disputed before us that in pursuance of Section 33 of the Insolvency & Bankruptcy Code CA-1144(PB)/2018 was accepted on 01.05.2019 and Liquidation of the corporate debtor was ordered as recommended by the CoC. The Liquidation proceedings are in progress and are pending before the Liquidator. Any claim by anyone would be competent before the Liquidator and if any adverse decision is given by the Liquidator then the provisions for filing an appeal has been made." 2. For the sake of brevity, the facts of the case are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore letters dated 24.09.2018 and 01.10.2018 were issued demanding that the Appellant refund the purported expense fees and payment made to consultant. Aggrieved by the arbitrary fixation of fee and unwarranted recovery letters the Appellant filed CA 1208(PB)/2018 and CA No. 1268 (PB)/2018 before the Adjudicating Authority, which vide Order dated 11.02.2019, directed R-1 to reconsidered fees and take a reasonable decision. * However again no decision was taken by the CoC in terms of the Order of the Adjudicating Authority and meanwhile on 01.05.2019, the 'Corporate Debtor' went into Liquidation. * The Adjudicating Authority in the Impugned Order dated 22.11.2019 directed the Appellant to file a 'Claim' before a Liquidator. * During the pendency of the Appeal, IBBI issued a Notice of Inspection dated 13.02.2020 and the Appellant responded vide Reply dated 19.02.2020 and a Draft Inspection Report dated 31.07.2020 against the Appellant was issued, for which, the Appellant submitted her Reply on 14.08.2020 to the Draft Inspection Report. * It is submitted by the Learned Counsel that the Liquidator does not have the power to decide the fees of the IRP and the RP or to sit in Appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Only once in the CoC Meeting held on 05.05.2018, the Appellant was requested not to make any further payments to the advisors. * It has been 30 months since the Appellant has handed over the charge of the 'Corporate Debtor' to R-1 and almost 18 months since the Liquidation Order has been passed, however till date no reasonable fee has been fixed to pay the Appellant. The direction given by the Adjudicating Authority to file a 'Claim' before the Liquidator is erroneous as the fee of the RP is the 'CIRP Cost' and cannot be considered as a 'Claim' as defined under Section 3(6) of the Code. Learned Counsel placed reliance on the Judgement of the Hon'ble Supreme Court in Civil Appeal No. 4065/2020 in 'Alok Kaushik' Vs. 'Mrs. Bhuvaneshwari Ramanathan & Ors.'. 4. Submissions of the Learned Counsel representing R-1 and R-3: * During the pendency of the present Appeal, on a complaint filed by the 'Corporate Debtor' through R-3 against the Appellant, the IBBI vide Order dated 14.03.2022 passed strictures against the Appellant and banned the Appellant from undertaking any assignment for a period of 1 year. * The Appellant was not holding office in the capacity of IRP/RP for the entire ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is only in the context of the fee of the professionals appointed by the Resolution Professional. Further, the CoC has already decided her fees for her tenure as directed by the Adjudicating Authority vide Order dated 05.07.2018 and secondly a Liquidator was appointed and thus the 'Claim' should be filed before the Liquidator and that there is no error in the Impugned Order passed by the Adjudicating Authority. Assessment: 5. The main issues which arise in this Appeal are: * Whether the Adjudicating Authority was justified in directing the Appellant to file her 'Claim' before the Liquidator as the 'Corporate Debtor' was under Liquidation. * Whether the fee of an RP falls under the definition of a 'Claim' as defined under the Code. * Whether the fee of a Resolution Professional is required to be fixed by CoC, failing which such decisions/determination is to be made by the Adjudicating Authority under the provisions of Section 60(5) of the Code read with Regulation 33(2) of the CIRP Regulation to fix the fees as payable to the RP. 6. The expression 'Insolvency Resolution Costs' as defined under Section 5(13) of the Code, Regulation 31 of the IRP Regulations, Regulation 33 whi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....curred on or by the IP to the extent ratified under Regulation 33. Clause (e) refers to other costs directly relating to the CIRP and approved by the CoC. Regulation 33 provides for the costs of the IRP: "33. Costs of the interim resolution professional.- (1) The applicant shall fix the expenses to be incurred on or by the interim resolution professional. (2) The Adjudicating Authority shall fix expenses where the applicant has not fixed expenses under sub-regulation (1). (3) The applicant shall bear the expenses which shall be reimbursed by the committee to the extent it ratifies. (4) The amount of expenses ratified by the committee shall be treated as insolvency resolution process costs. Explanation.- For the purposes of this regulation, "expenses" include the fee to be paid to the interim resolution professional, fee to be paid to insolvency professional entity, if any and fee to be paid to professionals, if any, and other expenses to be incurred by the interim resolution professional." 15. "Resolution professional costs" are defined in Regulation 34: "34. Resolution professional costs.- The committee shall fix the expenses to be incurred on or by the resolution ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the NCLT to decide on the CIRP costs, the NCLT held that it was rendered functus officio in relation to the appellant's claim. This, in our view, would be an incorrect reading of the jurisdiction of the NCLT as an Adjudicating Authority under the IBC. In a recent judgment in Gujarat Urja Vikas Nigam Limited vs Amit Gupta and Others, this Court clarified the jurisdiction of the NCLT/NCLAT under Section 60(5)(c) of the IBC in the following terms: "71. The institutional framework under the IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were distributed earlier across multiple fora...Therefore, considering the text of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the Corporate Debtor. However, in doing do, we issue a note of caution to the NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the Corporate Debtor. The nexus with th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssionals which form part of the CIRP costs." 7. In the instant case, vide Order dated 05.07.2018 in CA 428(PB)/2018, the Adjudicating Authority on an Application preferred by the IRP/RP/Appellant herein has directed the CoC to fix the fee of the RP within two weeks. 8. Vide Order dated 11.02.2019 in CA 1208(PB)/2018 which is an Application preferred by the Appellant herein aggrieved by the sum of Rs.40,000/- p.m. fixed as fee, the Adjudicating Authority ordered as follows: "CA-1208(PB)/2018 It has been brought to our notice that the applicant-IRP Reeta Gupta has to be paid Rs. 40,000/- per month. In her place the new RP has been engaged for a fee of Rs. 16,00,000/- per month. The Resolution Professional is directed to consider the fee of the applicant and take a reasonable/rational decision at the earliest." 9. At this juncture, this Tribunal is of the considered view that the question which mainly arises in this Appeal is whether the Liquidator is having the jurisdiction to decide the fee of the RP as the CoC is no longer in existence. By virtue of Section 5(13)(e) of the Code, the fees and expenses incurred by the Appellant comes under the ambit of Insolvency Resolution Pr....