NCLAT Allows Resolution Professional to Cover Essential Expenses During Corporate Insolvency Process with Refund Safeguards.

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Full Text of the Document

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....NCLAT permitted the new Resolution Professional (RP) to manage essential operational expenses of the Corporate Debtor during CIRP. Authorized expenditures include security expenses, statutory auditor fees, practicing company secretary costs, and RP remuneration as previously approved by the Adjudicating Authority. All payments require undertakings from recipients confirming refund if not ratified by reconstituted Committee of Creditors (CoC). Employee salary claims must be presented to CoC for approval. The tribunal restricted RP from engaging new professionals during CIRP. The decision follows precedent established in Sunil Kumar Jain & Ors. vs. Sunaresh Bhatt & Ors., which stipulates CIRP costs are payable only for actual work performed during the CIRP period.....