Case Law Details
DBS Bank India Pvt. Ltd. Vs Rakesh Kumar Jain (NCLAT Delhi)
The proviso in Regulation 12(3) of CIRP Regulations, 2016 clearly stipulates that if any decision is taken by the committee (CoC), prior to the reconstitution, which in this case is the ratification of the fees and the expenses, its validity will not be affected. Admittedly the CIRP Costs were approved by the COC prior to the inclusion of the Appellant Bank and hence as per the proviso to Regulation 12(3) of CIRP Regulations, 2016, it is the liability of the Appellant Bank to pay the expenses. The quantum of costs and fees was ratified by the earlier CoC and the Appellant has not objected to any such issues having participated in the Meetings and specifically being the sole CoC. The Adjudicating Authority has only very fairly bifurcated the expenses to be paid by the ‘Operational Creditor’ and Rs. 10,20,858/- to be paid by the Appellant Bank for the subsequent period till the Liquidation Resolution was passed.
FULL TEXT OF THE NCLAT DELHI JUDGMENT/ORDER
1. Aggrieved by the Impugned Order dated 24.03.2021, passed by the Learned Adjudicating Authority (National Company Law Tribunal, New Delhi, Court IV) in IA 1588/ND/2020 in IB/777/(ND)/2019 directing the Appellant Bank to pay Rs. 10,20,858/- to Mr. Rakesh Kumar Jain/the Resolution Professional, on an Application IA 1588/ND/2020 preferred by the Resolution Professional seeking the payment of his fees.
2. Learned Counsel for the Appellant submitted that the Appellant is the sole ‘Financial Creditor’ of the reconstituted CoC and cannot be saddled with the liability of payment of the costs and fees of the RP. It is submitted that the remuneration and the expenses of the RP was fixed and approved by the ‘Operational Creditor’ who was the sole Member of the earlier CoC and immediately thereafter the entire constitution of the CoC was changed and the said ‘Operational Creditor’ was no longer a part of the CoC. The Appellant Bank today is the sole Member of the reconstituted CoC and has never ratified the remunerations and expenses. It is submitted that the RP has not discharged his responsibilities for which he is now claiming fees and also that the fees of the RP is not commensurate to the work put in by him. The CIRP cost which includes the fees of the RP has been accorded priority of payment in Liquidation and that the Adjudicating Authority did not appreciate the import of Section 53 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as ‘The Code’) which gives priority payment of CIRP costs out of the proceeds of Liquidation of the ‘Corporate Debtor’ over and above any payment to a ‘Financial Creditor’.
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