The Principal Bench of the NCLAT in New Delhi ruled that the NCLT has jurisdiction to compute fees and expenses, as the Financial Creditor is liable for CIRP costs and fees, which the Adjudicating Authority is to determine.
Brief Facts:
The case concerns the computation of fees and expenses related to the Corporate Insolvency Resolution Process (CIRP) for Raj Buildhome Pvt. Ltd. The Financial Creditor was directed to pay the CIRP costs and fees, which were to be determined by the NCLT. However, disputes arose regarding the payment and computation of these fees. The NCLT ruled that the Financial Creditor had not committed contempt and dismissed the contempt petition while computing specific amounts for fees and expenses. Therefore, an appeal has been preferred against the judgment of the NCLT.
Contentions of the Appellant:
It was contended that in the contempt jurisdiction, the NCLT should not have proceeded to compute the fee and expenses of the Resolution Professional (RP). Additionally, it was submitted that the directions regarding the expenses were unsustainable as there was no supporting material, and that many of the expenses were duplicated.
Observations of the Tribunal:
The Bench observed that the NCLT has jurisdiction to proceed with the computation of fees and expenses. The Appellate Tribunal had specifically directed that the Financial Creditor is liable to pay the CIRP cost and fees, which were to be reported to and determined by the NCLT. It was noted that the NCLT had complied with the directive to determine the fee and expenses, and the Financial Creditor cannot escape the liability to pay these amounts.
Additionally, it was observed that the NCLT’s determination of fees and expenses was based on the material before it, although the direction regarding a specific expense amount was set aside as it was uncalled for the charter should foster a culture of courtesy and helpfulness within the municipal body.
The decision of the Tribunal:
Accordingly, the Bench directed the Financial Creditor to pay the determined fee and expenses. The specific direction regarding an additional expense was set aside.
Case Title: Khozim Yusuf Nagarwala vs. Satyendra Prasad Khorania (Erstwhile RP of Raj Buildhome Pvt. Ltd.)
Coram: Justice Ashok Bhushan, Barun Mitra, Arun Baroka
Case No.: Company Appeal (AT) (Insolvency) No. 871 of 2023
Advocate for the Respondent: Adv. Mr. Amol Vyas
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