Committee Of Creditors Are Competent To Revise The Approved Fees Of Resolution Professional: NCLAT

National Company Law Appellate Tribunal (NCLAT) principal bench comprising of Justice Ashok Bhushan and Ms. Shresha Merla in the case of Kushwinder Singhal versus Reena Tiwari held that the Committee of Creditors (COC) is fully competent to revise its earlier approval of the fees of the Resolution Professional (RP). The erstwhile Resolution Professional of Bestways Transport India Pvt Ltd. (Bestways) Mr. Kushwinder Singhal was aggrieved by the order dated 24.02.2022 of NCLT Chandigarh wherein it has replaced Kushwinder Singhal as the RP of Bestways after resolution passed by the COC of Bestways and directed the reconstituted COC to decide the fees of the erstwhile RP. Brief Facts After the initiation of the Corporate Insolvency Resolution Process (CIRP) of Bestways, COC decided the fees to be paid to Mr. Kushwinder Singhal to function as the Resolution Professional of Bestways but later on the COC vide its resolution dated 17.05.2021 passed a resolution to replace Mr. Kushwinder Singhal and appoint Mr. Vijay Kumar Gupta as the Resolution Professional of Bestways. Subsequently, an application was filed and NCLT vide its order dated 24.02.2022 directed the replacement of RP and also directed the reconstituted COC to decide the fees of erstwhile RP. Contentions Of Erstwhile Resolution Professional It was contended by the erstwhile RP that there was no requirement of any direction to decide the fees of RP when earlier the COC has already decided the fees of erstwhile RP. It was further argued that by virtue of Regulation 12(3) of CIRP regulation, addition of any member will not affect the validity of earlier decision and therefore, the earlier decision of COC is valid. Observations/Decision Of NCLAT NCLAT observed that the COC passed the resolution to remove the RP on 17.05.2020 and a major portion of the fees claimed by the RP is for the costs which was incurred subsequent to resolution dated 17.05.2020 and therefore, it is appropriate to consider the CIRP cost by COC. NCLAT further held that COC is fully competent to revise the fees of RP even if it is already approved by the earlier COC. "…The entitlement of fee depends on several factors including the change of circumstances, the length of CIRP proceeding hence we are of the view that Regulation 12(3) proviso does not fetter the CoC to consider the fee and expenses…." NCLAT accordingly dismissed the appeal filed by the RP. Case Title: Kushwinder Singhal versus Reena Tiwari Counsel for Appellant: Mr. Abhishek Anand, Mr. Viren Sharma and Mr. Karan Kohli Click Here To Read/Download Order

Committee Of Creditors Are Competent To Revise The Approved Fees Of Resolution Professional: NCLAT

Akshay Sharma

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Committee Of Creditors Are Competent To Revise The Approved Fees Of Resolution Professional: NCLAT

Akshay Sharma

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers