AI Structured Summary
Not yet generated for this judgment
Judgment
ORDER
17.11.2022: The Appellants / Respondents have preferred the instant Comp. App. (AT)(CH)(Ins) No.407/2022 as an ‘Aggrieved Person’, on being dissatisfied with the ‘impugned order’ in IA Nos.295/2021 & 121/2022 in CP (IB) No.165/BB/2018 dated 20.07.2022, passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Bengaluru Bench, Bengaluru).
The ‘Adjudicating Authority’, (National Company Law Tribunal, Bengaluru Bench, Bengaluru), while passing the ‘impugned order’ in IA Nos.295/2021 & 121/2022 in CP (IB) No.165/BB/2018 on 20.07.2022, among other things had made the following observations: -
“All the Financial Creditors are directed to pay the dues of erstwhile RP within two weeks and file the receipt of payment, if may, proportionately within three weeks.” and directed the ‘Listing’ of the matter on 24.08.2022.
According to the Learned Counsel for the ‘Appellants’, before the ‘Adjudicating Authority’, (National Company Law Tribunal, Bengaluru Bench, Bengaluru), the 1st Respondent / State Bank of India had filed a ‘Reply’ (to IA No.295/2021 in CP (IB) No.165/BB/2018), stating that Circular of the IBBI bearing No.IP/004/2018 dated 16.01.2018 had proceeded to the following effect: -
Para 2 : “The Code of Conduct for Insolvency Professionals under the IBBI (Insolvency Professionals) Regulations, 2016 require that an insolvency professional must provide services for remuneration which is charge in a transparent manner, and is a reasonable reflection of the work necessarily and properly undertaken. He shall not accept any fees or charges other than those which are disclosed to and approved by the persons fixing his remuneration”.
The fees charged should be ‘reasonable’ and to directly ‘related to the work done’ by the ‘Resolution Professional’, and further that the IBBI in its ‘Circular No.IBBI/IP/013/2018 dated 12.06.2018 had mentioned that an ‘Insolvency Professional’ is obliged under Section 208(2)(a) of the Insolvency & Bankruptcy Code, 2016 to take reasonable care and diligence, while performing his duties and incurring expenses and, therefore, he has to ensure that not only fee payable to him, is reasonable, but also, the other expenses incurred by him are reasonable.
The crystalline stand of the Learned Counsel for the ‘Appellants’ is that in spite of the fact that the ‘Appellants’ / ‘Respondents’ had brought it to the notice of the ‘Adjudicating Authority’, (National Company Law Tribunal, Bengaluru Bench, Bengaluru) of the IBBI dated 12.06.2018, as aforesaid, the ‘Adjudicating Authority’ (National Company Law Tribunal, Bengaluru Bench, Bengaluru) had directed the ‘Appellants’ / ‘Respondents’, to pay the ‘Dues’ of the ‘Insolvency Resolution Professional’, within ‘Two Weeks’, (from 20.07.2022) and file the ‘Receipt of Payment’, if suppose made within ‘Three Weeks’ and hence, the ‘Appellants’ / ‘Respondents’ are saddled with Harsh and Burdensome order thereby, their rights are prejudiced and affected.
Added further, the Learned Counsels appearing for the ‘Appellants’ / ‘Respondents’ adverts to the ‘Circular dated 16.01.2018 of the ‘Insolvency and Bankruptcy Board of India’, wherein at Paragraph Nos.2 to 4, it is mentioned as under: -
2.“The Code of Conduct for Insolvency Professionals under the IBBI (Insolvency Professionals) Regulations, 2016 require that an insolvency professional must provide services for remuneration which is charged in a transparent manner, and is a reasonable reflection of the work necessarily and properly undertaken. He shall not accept any fees or charges other than those which are disclosed to and approved by the persons fixing his remuneration.
3.In view of the above, it is clarified that an insolvency professional shall render services for a fee which is a reasonable reflection of his work, raise bills / invoices in the name towards such fees, and such fees shall be paid to his bank account. Any payment of fees for the services of any insolvency professional to any person other than the insolvency professional shall not form part of the insolvency professional process cost.
4.Similarly, any other professional appointed by an insolvency professional shall raise bills / invoices in his / its (such as registered valuer) name towards such fees, and such fees shall be paid to his / its bank account.”
It transpires that before the ‘Adjudicating Authority’ (National Company Law Tribunal, Bengaluru Bench, Bengaluru) IA Nos.295/2021 & 121/2022 in CP (IB) No.165/BB/2018 comes up for ‘Hearing’ on 15.12.2022.
The Learned Counsel for the ‘Appellants’ points out that the ‘Adjudicating Authority’ (National Company Law Tribunal, Bengaluru Bench, Bengaluru) made an ‘oral observation’, at the time of passing the ‘impugned order’ on 20.07.2022 that if the dues are not paid and the order dated 20.07.2022 is not complied with, then, ‘Contempt Proceedings’ will be initiated against the ‘Appellants’.
It is represented on behalf of the ‘1st Respondent’ / ‘Resolution Professional’ by the Learned Counsel Mr. Abhishek Anand that the Fees of the 1st Respondent / Resolution Professional have been approved by the ‘Committee of Creditors’ and therefore, the ‘Appellants’ will be estopped from raising ‘objections’ before the ‘Adjudicating Authority’, (National Company Law Tribunal, Bengaluru Bench, Bengaluru), at the time of ‘Hearing’ the matter.
On a careful consideration of the contentions advanced on behalf of the ‘Appellants’, this ‘Tribunal’, without delving deep into the ‘subject matter’ in issue, and not expressing any opinion, one way or the other, on the ‘Merits’, of the pending matter, at this stage, simpliciter, directs the ‘Adjudicating Authority’ (National Company Law Tribunal, Bengaluru Bench, Bengaluru) to take into consideration the Circular of the IBBI dated 16.01.2018 and the ‘Circular’ dated 12.06.2018, made mention of by the ‘Appellants’ (in the Counter to IA Nos.295/2021 in CP (IB) No.165/BB/2018 filed on behalf of the Committee of Creditors 3rd to 4th Respondent), and in the event of any payment ‘not being made’, and also not ‘filing the Receipt’, for the said payment, is to provide an opportunity of ‘Hearing’ to the ‘Appellants’ and ‘other Parties’ to the proceedings / ‘List’, by adhering to the ‘principles of natural Justice’ and to pass a ‘reasoned speaking order’ on ‘Merits’, in a qualitative and quantitative term, adverting to the points raised by the parties and make out the same in ‘one way or the other’, completely, comprehensively and finally dispose of the said IA Nos.295/2021 in CP (IB) No.165/BB/2018, of course, in the manner known to ‘Law’ and in accordance with ‘Law’.
It is open to the respective parties (if they so desire / advised), to raise all factual and legal ‘Pleas’ before the ‘Adjudicating Authority’ (National Company Law Tribunal, Bengaluru Bench, Bengaluru), who shall at the time of passing the ‘Final Order’, is to take into account the same and do the needful, in this regard. It is made quite clear by this ‘Tribunal’ that in IA Nos.295/2021 in CP (IB) No.165/BB/2018, the ‘Adjudicating Authority’, (National Company Law Tribunal, Bengaluru Bench, Bengaluru) shall not be influenced with any of the ‘observations’ made by this ‘Tribunal’ and at the time of passing ‘Final Orders’ is to decide IA Nos.295/2021 in CP (IB) No.165/BB/2018 in a ‘Fair’, ‘Just’, and in an Objective manner.
With the above ‘observations and directions’, the Company Appeal (AT)(CH)(Ins) No.407/2022 stands ‘disposed of’. The connected IA/994/2022 (for ‘Stay’) IA/995/2022 (for ‘Urgent Hearing’) are Closed.