Resolution Professional Not Entitled To Fees Or Expenses During Stay Of CIRP Proceedings: NCLT Bengaluru

The National Company Law Tribunal (NCLT), Bengaluru Bench, comprising Sunil Kumar Aggarwal (Member-Judicial) and Radhakrishna Sreepada (Member-Technical), has held that an IRP/RP is not entitled to fees or expenses incurred during the stay of CIRP proceedings granted by NCLAT or Judicial Forum. The CIRP of the corporate debtor was initiated in furtherance of a section 7 petition, and the applicant was appointed as the interim resolution professional. However, later on the CIRP was stayed by the NCLAT. The parties made a one-time settlement, and the NCLAT closed the CIRP and disposed of the appeal. Thereafter, the interim resolution professional filed the present application seeking payment of the professional fees and legal expenses amounting to Rs. 10,67,923. The applicant also sought directions for filing the Form FA as a pre-condition for withdrawal. Contention of the Parties The applicant requested the tribunal to direct the respondents to make payment of the professional and to direct the respondent to file Form FA for the withdrawal of the company petition. It submitted that the one-time settlement doesn't extinguish the liability to pay the CIRP cost, and Section 12A mandates the full payment before withdrawal. Per contra, the corporate debtor submitted that the CIRP was stayed within one week and no substantive work was performed by the applicant. Therefore, the applicant is not entitled to fees during the stay period and thereafter. It further argued Form FA is not required, as the NCLAT itself modified the order and closed the CIRP. Observations of the Adjudicating Authority The NCLT observed that once the stay is granted on the CIRP proceedings, the IRP or RP is prohibited from taking any further steps in the CIRP. Therefore, no fees should be paid, as no action is being taken. The bench further observed that the CIRP was closed and the adjudicating authority's order was modified in terms of the NCLAT order. Also, no committee of creditors was constituted. Thus, this situation doesn't amount to withdrawal of the CIRP application, and filing of Form FA is not required. Lastly, the NCLT examined the activities performed by the IRP between admission and stay and awarded the amount of Rs. 1,50,000 payable by the corporate debtor. Accordingly, the appeal was partly allowed. Case Name: Ms. R. Bhuvaneshwari, Interim Resolution Professional of Mindlogicx Infratec Ltd. v. Union Bank of India. Case No.: I.A. No. 586/2025 in C.P. (IB) No. 126/BB/2022 Coram: Sunil Kumar Aggarwal (Member-Judicial) and Radhakrishna Sreepada (Member-Technical) Order Date: 12.09.2025Click Here To Read/Download The Order

Resolution Professional Not Entitled To Fees Or Expenses During Stay Of CIRP Proceedings: NCLT Bengaluru

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Mohd.Rehan Ali

Resolution Professional Not Entitled To Fees Or Expenses During Stay Of CIRP Proceedings: NCLT Bengaluru

Mohd.Rehan Ali

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INR 1099+GST

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Mohd.Rehan Ali

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