IBC Laws Blog

ONE PAGE 37 – In the matter of M/s Kalisma Streel Pvt. Ltd.

ONE PAGE 37 – In the matter of M/s Kalisma Streel Pvt. Ltd.  
Is the IRP eligible to get his professional fee till the RP takes charge ?
#Courts:  NCLT Mumbai – MA 3562 of 2019 in CP(IB)2826/MB/2018 Dt 31.05.2021

1. Background:

a. MA 3562 filed by erstwhile IRP with a prayer to direct the COC to pay his due and legitimate fee for rendering the services after expiry of 30 days till the date of appointment of RP.

b. Order for replacement of the RP was received on 26.11.2019 but charge was handed over to the new RP earlier, ie on 05.11.2019.

c. IRP in the 1st COC meeting reduced his fee from Rs.4.9 lakhs/pm + GST + out of pocket expenses to Rs.4.25 lakhs/pm + GST + out of pocket expenses till the CIRP or appointment of new RP, which the COC rejected in the 2nd COC meeting.

d. IRP spent considerable time, energy and efforts to carry out the CIRP and also utilized the services of CA, CS, Lawyers etc. He conducted 4 COC meetings, filed 5 progress reports to NCLT time to time and appointed 2 valuers as per the code.

e. NCLT directed the RP to take due consideration and ratification of the IRP fee before COC and to communicate the decision of COC to IRP. RP accordingly invited IRP to the COC meeting, wherein COC discussed amongst themselves and unilaterally, in breach of earlier agreement, decided to reduce the IRP fee to Rs.2.35 lakhs/pm at the same rate which is paid to the present RP, subject IRP handing over all the documents, record & information to the RP.

f. IRP agreed to handover all the documents, records and information to the RP, he even agreed to the fee decided by COC but did not agree with number of days being considered for payment. COC suggested 35 days while according to the IRP, he is entitled to get payment for 51 days.  The differences are as below

S# Event Dates  
1 Admission Order Date 22-Jul-19  
2 Order received on  16-Aug-19  
3 1st COC meeting Date 09-Sep-19  
4 Order date for the change of RP  14-Oct-19  
5 Order for change of RP received on  26-Nov-19  
6 Handing over of charge to RP 05-Nov-19  
7 Additional days considered by COC & RP: Order date for Change of RP (less) 1st COC meeting date 35 days  7 = (3 – 4)
8 Additional days as per IRP: Date of handing over to (less) Admission order receipt date (less) 30 days* of IRP period 51 days 8 = (6-2 – 30*)

2. NCLT Evaluation & Judgment:

a. NCLT observed that the COC has reduced the fee unilaterally from Rs.4.25 lakhs to Rs.2.35 lakhs per month and further reduced the number of days eligible to charge fee for the providing the services. NCLT is satisfied that till the date of handing over, IRP performed his duties as there cannot be vacuum during CIRP period.

b. NCLT directed the COC to pay for 51days as claimed by the IRP along with an interest of 12% pa from the original due date. Under rule 11 of NCLT rules, NCLAT also directed the COC to pay Rs.50Th towards legal costs.

MS Mano Ranjani

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