CMA Harshad Deshpande Vs Rakesh Kumar Relan (NCLAT Delhi)
NCLT’s Reduction of IRP Remuneration to ₹50,000 Monthly Fee during stay period was held reasonable: NCLAT Delhi
Conclusion: Fee reduction of ₹50,000 for the Interim Resolution Professional (IRP) ordered by NCLT was reasonable, given that the IRP’s role was restricted by an interim stay on the constitution of the Committee of Creditors (CoC) between February 28 and September 1, 2023.
Held: The issue arose when the insolvency process against the corporate debtor Tradco Deesan Pvt. Ltd. began on February 15, 2023, under Section 7 of IBC Code with Deshpande appointed as IRP. NCLAT, while hearing an appeal by the suspended board, stayed formation of the CoC, permitting Deshpande only to verify and collate creditor claims. After the stay was lifted in September 2023, the CoC replaced Deshpande with Rakesh Kumar Relan as Resolution Professional (RP). The CoC later approved partial fees for Deshpande but refused payment for the six‑month stay period, arguing that no substantial work had been done. Appellant, CMA Harshad Deshpande, argued that he had verified claims exceeding ₹250 crore and continued performing statutory duties throughout the stay. He argued that under Regulation 34B read with Schedule II of the CIRP Regulations, he was entitled to at least ₹2 lakh per month, and that the CoC had initially agreed to ₹2.5 lakh. He maintained that the NCLT’s order granting only ₹50,000 per month contradicted the mandatory minimum fee structure and undervalued his professional contribution. CoC, represented by State Bank of India, asserted that the CIRP had been substantially halted during the stay and that Deshpande’s duties were limited to claim verification. It argued that the NCLT’s compromise,₹50,000 per month plus verified expenses, was equitable, reflecting the curtailed scope of work. It was held that while Deshpande had indeed verified claims, the scope of his functions was restricted by the interim order. Tribunal held that the minimum fee rule under Regulation 34B did not automatically apply when the IRP’s work was limited by judicial directions. Adjudicating Authority correctly appreciated the factual matrix and adopted an equitable approach by granting reasonable remuneration proportionate to the functions actually performed by the Appellant during the restricted CIRP period. Accordingly, the appeal was dismissed.
