One Page #1 – In matter of Kavveri Telecom Infrastructure Limited
Application withdrawn u/s 12A without making payment to the Registered valuer.
NCLT & NCLAT dismissed the application stating functus officio.
Courts: NCLT-Blr, NCLAT-Delhi, Supreme Court (CA#4065/2020-15.03.021)
- Facts of the Case:
- RP appointed valuer (RV) to value P&M at 115 sites for a fee of Rs.7.7 lacs + GST + other expenses)
- Valuation done at 84 sites and valuer visited 40 sites.
- NCLAT set aside the CIRP order and remanded the matter back to NCLT to decide on CIRP costs.
- NCLT decided the fee of RP reducing 20% from fee ratified by COC.
- RP cancelled appointment of RV and RV agreed to reduce his fee by 25% fee including the expenses of Rs.52000 incurred by him. But RP informed that COC ratified only Rs.50,000/-.
- RV filed an application before NCLT u/s 60(5) but NCLT dismissed the application concluding that it had been rendered functus officio. (officer who is no longer is office)
- RV then filed appeal before NCLAT and NCLAT rejected the contention of the RV noting that Rs.50000/- has already been paid to the RV.
- RV then moved SC u/s 62.
- Points of Law observed by SC:
- Section 5(13) of the Code – Insolvency resolution process costs
- Regulation 31 of CIRP regulations – Insolvency resolution process costs
- Regulation 33 of CIRP regulations – IRP Costs
- Regulation 34 of CIRP regulations – RP Costs
- Regulation 30A (7) – Deposit of Expenses during withdrawal of application
- Case Laws:
- Gujarat Urja Vikas Nigam Limited v Amit Gupta & Others: NCLT & NCLAT u/s 60(5)(c) has jurisdiction to adjudicate disputes which arise solely from or which relate to insolvency of the Corporate Debtor.
- NCLT is sufficiently empowered under Section 60(5)(c) of the Code to decide the amount which is payable to an expert valuer as an intrinsic part of the CIRP costs.
- Availability of a grievance redressal mechanism u/s 217 the IBC against an insolvency professional does not divest the NCLT of its jurisdiction u/s 60(5)(c) of the IBC to consider the amount payable to RV. The purpose of such a grievance redressal mechanism is to penalize errant conduct of the RP and not to determine the claims of other professionals which form part of the CIRP costs
- Proceedings are remitted back to the NCLT for determining the claim of the RV for the payment of his professional charges.