Rajesh Kumar Sinha Vs. Apogee Enterprises Pvt. Ltd. - The fees of the Resolution Professional must be commensurate to and be a reasonable compensation of the amount of work involved.

NCLT New Delhi-VI (01.04.2022) in Rajesh Kumar Sinha  Vs. Apogee Enterprises Pvt. Ltd.   [IA-457/2021 IN IB-514/ND/2020  ] held that;

• As we have not come across enabling provision with regard to fixation of the fee of IRP in matters pertaining to initiation  of proceeding under Section 95 of IBC wherein fees/expenses  were not fixed by the financial creditor, 

• We therefore have  drawn analogy from Regulation 33(2) of the Insolvency and  Bankruptcy Board of India (Insolvency Resolution Process  for Corporate Persons) Regulations, 2016. 

• The fees of the Resolution  Professional must be  commensurate to and be a reasonable compensation of the  amount of work involved.

Excerpts of the order;

# 1. The present application  is filed by the Resolution  Professional, Mr. Rajesh Kumar Sinha, for issue of directions  to the Creditor to pay the remuneration of the Resolution  Professional on 16.01.2021. This is a case wherein the  Creditor has filed application under Section 95 by itself and  not through the Resolution Professional. In exercise of  powers conferred under sub-section 3 of Section 97, the IBBI  has nominated the Resolution Professional for carrying out  the Insolvency Resolution Process by its letter/file no: IP  13011/1/2019-IBBI/884/250 dated 05-03-2020. 

 

# 2. The creditor has filed a detailed reply on 04.01.2022  disputing the remuneration claimed by the IRP.  

 

# 3. We have gone through the application and reply filed in this  matter. The arguments advanced by the counsels for both  the parties and written submissions have been considered.  To be precise and concise and to ensure brevity, those  submissions have not been reproduced here. It transpires  that there was not any prior consensus or any formal  understanding amongst the parties regarding fees and  expenses of the RP. This Tribunal is of view that the Creditor  i.e., Apogee Enterprises Pvt. Ltd should have fixed the fees of  the IRP/RP clearly and amicably well in advance or prior to  the commencement of the work by IRP. 

 

# 4. During the proceedings, both the parties have submitted that  this tribunal may decide the fees and they have also  consented to abide by the order of this tribunal. 

 

# 5. We have examined the question of whether the Adjudicating  Authority can determine the fees payable to the Resolution  Professional in case the fee/expenses of the Resolution  Professional have not been fixed/determined by the Financial Creditor/Applicant. 

 

# 6. As we have not come across enabling provision with regard to fixation of the fee of IRP in matters pertaining to initiation  of proceeding under Section 95 of IBC wherein fees/expenses  were not fixed by the financial creditor, we therefore have  drawn analogy from Regulation 33(2) of the Insolvency and  Bankruptcy Board of India (Insolvency Resolution Process  for Corporate Persons) Regulations, 2016. The said sub  regulation 2 of regulation 33 enables the Adjudicating  Authority to determine the fees of the IRP in case the same  is not fixed by the applicant.  Taking spirit of law from above, this Adjudicating Authority is of the view that it may decide the  remuneration/expenses of the IRP/RP specially when these  expenses/fees  were  not  fixed  in  advance  by  applicant/creditor. 

 

# 7. The fees of the Resolution  Professional must be  commensurate to and be a reasonable compensation of the  amount of work involved, we hereby fix the fees of the  Resolution Professional, as per the details given below: 

• i. Fees for the initial period 31st Aug 2020 to 14th Oct 2020:  Rs 3,50,000 per month as against the fees claimed by the  RP of Rs.4,50,000 per month. While determining the fees  for this period, we have duly taken into account the  various steps involved prior to submission of report as per  the provisions of the IBC, 2016. 

• ii.  Fees for the period w.e.f. 15th October, 2020 till the date of  compliance of this order: Rs. 50,000 per month as against  the fees claimed by the RP of Rs.1,00,000 per month. While  determining the fees of this period, we have considered the  fact of adjournment of the matter and also the quantum of  litigations managed/work performed by the Resolution  Professional before the Honble Supreme Court of India  and also before this Tribunal. 

• iii. All other expenses such as Counsel fees and Out of Pocket  expenses (as provided by the Resolution Professional in its   ‘Calculation Statement of Fees) are not unreasonable  considering the continuous involvement of the RP in the  matter. 

 

# 8. Creditor is directed to comply with this order within 10 days  and the compliance affidavit of this order may be filed before  this tribunal at the earliest. 

 

# 9. We further direct Registry NCLT, New Delhi to forward a copy  of this order to IBBI to look into the aspect of fixation of fee  of the IRP/RP in matters relating to personal guarantees and  to make/incorporate suitable regulation in the existing  regulations on 'Insolvency Resolution Process for Personal  Guarantors to Corporate Debtors' Regulations, 2019 so as to  reduce and rule-out the scope of litigation by the Creditor  and Resolution Professional. IBBI may also consider to draw  analogy from Sub-regulation (1) and (2) of Regulation 33 of  IBBI (Insolvency Resolution Process of Corporate Persons)  Regulations, 2016. 

 

# 10. The IA No. 457/ND/2021 in IB-514/ND/2020 stands  disposed of. 

 

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