Case Law Details
Sumit Bansal, Insolvency Professional Vs Committee of Creditors of JP Engineers Pvt. Ltd. (NCLAT Delhi)
NCLAT not agreed with the submissions of the Counsel for the Appellant that IBBI has no jurisdiction with regard to question of fee which is entitled to be paid to the IRP/ RP. The IBBI is clothed with Regulations making power under Section 240 of the Code.
The general power of framing regulations to carry out the provisions of this Code encompasses in itself the power to regulation regarding Insolvency Professionals. The Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 has already been framed where as per Regulation 7(2)(h), the Insolvency Resolution Professional has to be abide by the Code of Conduct specified in the First Schedule to these Regulations. In the First Schedule, Item 25 requires an Insolvency Professional to provide services for remuneration which is charged in a transparent manner, is a reasonable reflection of the work.
We thus are of the view that IBBI is fully clothed with jurisdiction to regulate payment of remuneration of RP and IRP both by framing regulation or by issuing executive instructions till regulation are not framed can regulate the subject. We thus are of the view that IBBI till necessary regulations are not framed regulating fee is empowered to issue executive instructions in this regard. The issue of payment of fee to the IRP/RP occur very frequently which needs to be regulated by Regulating Authority who is clothed with the power. The mere fact that IBBI has been asked to submit its recommendations by the Adjudicating Authority, in the present case, we see no reason to question the jurisdiction of IBBI to submit a recommendation. The recommendations may be helpful to determine the issue in accordance with guidelines and circulars issued by the IBBI in this respect, if any.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
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