TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 844
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....he Corporate Debtor namely, M/s. S.V.K. Shipping Services Pvt. Ltd. in which the Respondent No.1 contends that he had functioned as an IRP and therefore he is entitled to get his professional fee as per the resolution, which has been passed by the Committee of Creditors and that denial of the same would be unethical and contrary to provisions of law. The Respondent No.1 had filed an Interlocutory Application being, IA(IBC)/347/2022 in CP(IB)/202/9/AMR/2019, invoking the provisions contained under Section 60(5) of I & B Code, to be read with Rule 11 of the NCLT Rules, 2016, wherein, he had prayed for that, he would be entitled to receive a sum of Rs.9,05,058/- in respect of the amount payable towards fee and expenses, which has been incurred during the tenure of his functioning as an IRP. 3. Brief facts of the case are that a proceedings by way of Company Petition, stood instituted by invoking the provisions contained under Section 9 of I & B Code by M/s. Tricon Energy (India) Pvt. Ltd., being the Operational Creditor as against the Corporate Debtor. Upon culmination of the proceedings, the Corporate Debtor was admitted to the CIRP Proceedings by an order dated 13.05.2022, which si....
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....to the provisions contained under Regulation 33 of IBBI (Insolvency Resolution Process for Corporate Persons), Regulation 2016, which is extracted hereunder: - "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. 96[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.]" 5. In order to substantiate his contention the Learned Counsel for Appellants has further contended that the determination of the fee payable to the IRP has to be done in accordance with the stipulations contained under S....
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....only for the purposes as involved in the instant case with regards to the determination of the fee and expenses payable to the IRP, and for justifying of a previous decision already taken and to attach sanctity to it. 9. A decision to pay has had to be prior in time, which is to be subsequently ratified, and only then it would be deemed to have been approved to be made as an entitlement to the IRP for conducting the process. The word "ratification" has been widely considered under Section 196 of the Indian Contract Act, 1872, which means that, it is a confirmation or an adoption of a decision already made on behalf of someone, which is observed to be a mandatory condition. From the very outset, there has to be a prior decision. Meaning thereby, the prime obligation for taking the decision to do an act is an obligation, but ratification in itself is only procedural in nature, which provides an affirmation to a decision which has already been taken, and which could be either in writing or by way of words, or even orally. It contemplates that a ratification once it is even orally accepted by a conduct or even by an act, it will have the same implication as to be an original authority....
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.... of amount payable to IRP for the services rendered by him was not ratified in the subsequent 2nd CoC meeting. When the issue, cropped up, before the Learned Adjudicating Authority, it considered the issue and recorded the finding that the minutes of the CoC meeting as held on 09.06.2022, shows that it contained the agenda item, where the clarification was sought with regard to the emoluments of IRP and his continuance in the office and the CoC took a decision, that the IRP would be appointed and would continue to function on the basis of the fee which stood determined to be made payable as per the Agenda of the 1st CoC meeting. The minutes of the 1st CoC meeting was placed for ratification in the 2nd CoC meeting, and it was ratified, and that is what has been observed in the conclusion which has been arrived at by the Tribunal, and particularly, the finding which has been recorded in para 5, 6 & 7 in the impugned order, while answering the question as argued for by the Learned Counsel for the Appellant herein before the Learned Tribunal with regards to the implication of non-ratification of expenses and the fee payable to the IRP. 12. It was held by Learned Adjudicating Authority....