TaxTMI 
TaxTMI 
2025 (8) TMI 1476
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....ppellant towards CIRP costs, raised in the 08th CoC meeting, has been allowed and the Appellant has been directed to pay the amount as apportioned by the RP, within a period of 10 days and also asked for the report regarding payment made by each of the CoC members to be filed in the Court. 2. Notice in the appeal was issued on 04.10.2024 and in the meantime, operation of the impugned order qua the Appellant was stayed. 3. In brief, UCO Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short ' Code') before the Tribunal against the CD which was admitted on 28.10.2022. 4. The Appellant, being a financial creditor, filed its claim of Euros 1,77,40,328 equivalent to Rs. 158,97,81,751/- on 20.09.2023 which was duly accepted by the IRP/RP. 5. Initially, the Appellant was not allowed to vote in the CoC on the allegation of being a related party. 6. The Appellant filed an application bearing I.A No. 1649 of 2023 to challenge that classification, claiming a right of vote being the member of CoC. The Application was dismissed by the Tribunal on 11.12.2023 but the appeal filed by the Appellant bearing CA (AT) (Ins) No. 1683 of 2023 was al....
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....cation, the RP averred that as per Regulation 33 and 34 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (in short 'Regulations") it is the duty of the members of the CoC including the Appellant to pay the fee and costs incurred by the RP. The said averment is also reproduced as under:- "13. As per Regulation 33 and 34 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 it is the duty of the members of the CoC which includes the Respondents and particularly the Respondent nos. 1 to 3 herein to pay the fees and costs incurred by the Resolution Professional, once the same has been ratified by the CoC by passing a resolution to that effect. The Respondents by virtue of being Financial Creditors participating and voting in the CoC of the Corporate Debtor play a pivotal role in the insolvency resolution process under the IBC and have significant powers in deciding the fate of the insolvent entity (especially considering that Respondent No.1 holds the highest percentage of voting share." 12. In view of the aforesaid averments made, the following relief was prayed for:- a) An order be passed by this Hon....
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....the impugned order has only directed the Appellant to contribute CIRP costs and not towards interim finance for which a simple majority was required and not as provided in Section 28(1) r/w Section 28(3) of the Code. He has further submitted that fee to be paid to the IRP in terms of Regulation 34B includes expenses which may be paid from the contribution of the CoC members. It is further submitted that pursuant to inclusion in the CoC, the Appellant had been participating in the voting of the CoC meetings i.e. in the 6th CoC meeting held on 22.04.2024 the Appellant having 39.4% voting share, voted in favour of extension of the CIRP period and extension of timeline to submit resolution plans, in the 7th CoC meeting held on 15.05.2024, the Appellant further voted in favour of extension of timeline to submit resolution plans, in the 10th CoC meeting held on 24.07.2024 the Appellant approved exclusion of 232 days from CIRP period and in the 13th CoC meeting held on 07.10.2024 the Appellant approved the resolution for issuance of Form G for the third time. It is submitted that the Appellant while voting in favour of the cost entailing resolutions cannot be permitted to argue that it wi....
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....ons which include raising the interim finance. Section 28 is reproduced as under:- "Section 28. Approval of committee of creditors for certain actions (1) Notwithstanding anything contained in any other law for the time being in force, the resolution professional, during the corporate insolvency resolution process, shall not take any of the following actions without the prior approval of the committee of creditors namely:- (a) raise any interim finance in excess of the amount as may be decided by the committee of creditors in their meeting; (b) create any security interest over the assets of the corporate debtor; (c) change the capital structure of the corporate debtor, including by way of issuance of additional securities, creating a new class of securities or buying back or redemption of issued securities in case the corporate debtor is a company; (d) record any change in the ownership interest of the corporate debtor; (e) give instructions to financial institutions maintaining accounts of the corporate debtor for a debit transaction from any such accounts in excess of the amount as may be decided by the committee of ....
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....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.] Regulation 34: Resolution professional costs. 34. The committee shall fix the expenses to be incurred on or by the resolution professional and the expenses1 shall constitute insolvency resolution process costs. 2[Explanation. - For the purposes of this regulation, "expenses" include the fee to be paid to the 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 resolution professional.]" 22. Regulation 34(A) and 34(B) inserted in the Regulations w.e.f. 13.09.2022 are reproduced as under: - Regulation 34A: Disclosure of Costs. 1[34A. The interim resolution professional or the resolution professional, as the case may be, shall disclose item wise insolvency resolution process costs in such manner as may be required by the Board.] "Regulation 34B: F....
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.... to be raised by the RP during the insolvency resolution process, therefore, a mechanism has been provided in the Code to ensure that the RP may not misuse the finances of the CD which is already in distress. In this regard, Section 28(1)(a) provides that the RP, during the insolvency resolution process, shall not raise any interim finance in excess of the amount as may be decided by the CoC in their meeting and Section 28(3) further provides that no action under sub-section (1) shall be approved by the CoC unless approved by a vote of 66% of the voting share. 24. In so far as the present case is concerned, it is an admitted fact that the Appellant has 39.4% voting share in the CoC and had voted against the resolution for raising of finance of Rs. 1 Cr. by the RP which clearly means that the resolution has not been passed by 66% voting share of the CoC. In the absence of the resolution having been negatively voted upon by none else than the largest voting share held by the Appellant, the CIRP costs as claimed by the RP through the application could not have been allowed. 25. Before Regulation 34(B) was inserted on 13.09.2022, there was no such provision of contribution toward....
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.... @ INR 2,00,000 p.m . clerkage @:10% . GST Note: 1st Coc 30.09.23 6,78,310 6.78,310 al Admitted Claim 228.06 Cr w.e.f. 22.09.23 bjAdmitted Claim 375,23 Cr w.e.f. 14.12.23 Remuneration for the period 20.12.23 to 31.05.24 @ INR 3,00,000 p.m. + cierkage @10% + OST (Note] ajAdmitted Claim 635.06 Cr w.e.f. 20.12.23 20,97.735 20,97,735 RP - Chut of Pocket Expenses a)For the outstation visit to Darjeeling from 03.10.23 to 04.10,23 along with 2 nos. associates namely Mr. Dipanjan Das and Mr. Kapil Tiwari 3rd 060 did 10.01 24 34,353 34,353 Document 2 boFor the outstations visit tu 58,509 59,509 17.11.2023 cisinirance Premium Bir: 13 6.69.930 Tea Estates O Venue charges for Ise CuC meeting nl Oherol Grand conference room 12.809 17.009 IT Related expenses el Google 4,560 4.560 sabacripmon fue the month of Danain Charges for | year 3:384 3,384 wwweling di Quistation expenses of advocate and Self-incured by RP 4th Col attending physical hiraring 99,244 99.244 before Hon'ule NCLAT. Now 16.02.24 Delhi Principal Bench (includes airfare and Incul traveling conveyancej Sub-Total [A] 60,....