TMI Blog2021 (11) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Professional on 31.07.2018. Sub-section (4) of Section 22 requires that the Adjudicating Authority shall forward the name of the Resolution Professional proposed under clause (b) of sub-section (3) to the Board for its confirmation and shall make such appointment after confirmation by the Board. The most relevant provision is sub-section (5) of Section 22 which empowers the Adjudicating Authority to pass an order for the Interim Resolution Professional to continue to function as the Resolution Professional where the Board does not confirm the name of the proposed Resolution Professional within 10 days. The present case is not a case where Adjudicating Authority has passed any order after 31.07.2018 to continue the Interim Resolution Professional till the confirmation of the Board is received. After 10 days of sending the name of Resolution Professional to Board by the Adjudicating Authority, there being no order of the Adjudicating Authority to continue the Interim Resolution Professional as Resolution Professional, the Interim Resolution Professional has no right to continue to function as the Resolution Professional after such date. Obviously, the claim of the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (Corporate Debtor). The Adjudicating Authority by order dated 04.12.2017 admitted the petition. By subsequent order dated 18.06.2018 passed by the Adjudicating Authority, the Respondent- Rajmal Labhchand Mogra was appointed as Interim Resolution Professional. The Respondent issued public announcement in local newspaper dated 26.06.2018. The first meeting of the Committee of Creditors ( CoC for short) was held on 16.07.2018. One of the agendas of the meeting was to confirm and approve the appointment of Respondent as a Resolution Professional. The CoC was formed comprising of Invent Assets Securitisation and Reconstruction Pvt. Ltd. with 72.56% and Saraswat Co-operative Bank Ltd. with 27.44% voting rights. On Agenda Item No.11, Invent Assets Securitisation and Reconstruction Pvt. Ltd. said that they have discussed with Saraswat Co-operative Bank Ltd. to change the Interim Resolution Professional. The decision of the Agenda Item No.11 is as follows:- Agenda 11: To confirm and approve the appointment of Mr. Rajmal Labhchand Mogra (Registration No. IBBI/IPA-001/IP-P00344/2017-18/10912) as the resolution professional ( RP ) of the Corporate Debtor along with his fees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Interim Resolution Professional was dismissed as infructuous. In order dated 09.10.2018, the Adjudicating Authority has also directed the CoC to make the payment of the Interim Resolution Professional for the work conducted by him. In pursuance of the order dated 09.10.2018, vide notice dated 29.10.2018, the Respondent through its Advocate requested for clearing the total CIRP costs. In response to letter dated 09.10.2018, the Appellant forwarded a cheque dated 10.12.2018 for an amount of ₹ 5,40,000/- for the work conducted by the Respondent during the CIRP. The cheque was returned by the Respondent and thereafter an Application has been filed before the Adjudicating Authority. MA 802/2019 filed by the Respondent before the Adjudicating Authority seeking action for violation of the order dated 09.10.2018 and further direction to CoC to make payment of an amount of ₹ 40,20,600/-. The Adjudicating Authority took the view that as per Regulation 17(3) of the CIRP Regulations, 2016, the Interim Resolution Professional was bound to discharge duties till appointment of new Resolution Professional hence, the Interim Resolution Professional was entitled to receive the costs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Professional. The Respondent was willing to carry on the work and he has also filed an Application but due to the fact that he was obstructed in his working by the Appellant, it cannot be reason for denying his fee. It was submitted that as per Regulation 17(3) of the CIRP Regulations, 2016, where the appointment of Resolution Professional is delayed, the Interim Resolution Professional is entitled to perform the functions of the Resolution Professional from the fortieth day of the insolvency commencement date till a Resolution Professional is appointed under Section 22. The Resolution Professional having been appointed under Section 22 only on 09.10.2018, the appointment of Interim Resolution Professional was to continue till 09.10.2018 with entitlement of his fees also. 6. We have considered the submissions of the parties and perused the record. 7. The Adjudicating Authority by impugned order has directed calculation of fee of the Interim Resolution Professional upto 09.10.2018 when the Interim Resolution Professional was changed. The question for consideration in this Appeal is as to in the facts of the present case Respondent was entitle for his fee upto which date. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors resolves under sub-section (2)- (a) to continue the interim resolution professional as resolution professional [subject to a written consent from the interim resolution professional in the specified form], it shall communicate its decision to the interim resolution professional, the corporate debtor and the Adjudicating Authority; or (b) to replace the interim resolution professional, it shall file an application before the Adjudicating Authority for the appointment of the proposed resolution professional [along with a written consent from the proposed resolution professional in the specified form]. (4) The Adjudicating Authority shall forward the name of the resolution professional proposed under clause (b) of sub-section (3) to the Board for its confirmation and shall make such appointment after confirmation by the Board. (5) Where the Board does not confirm the name of the proposed resolution professional within ten days of the receipt of the name of the proposed resolution professional, the Adjudicating Authority shall, by order, direct the interim resolution professional to continue to function as the resolution professional until such time as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-regulation (1) of regulation 12. (2) The interim resolution professional shall hold the first meeting of the committee within seven days of filing the report under this regulation. (3) Where the appointment of resolution professional is delayed, the interim resolution professional shall perform the functions of the resolution professional from the fortieth day of the insolvency commencement date till a resolution professional is appointed under section 22. 12. Sub-regulation (3) of Regulation 17 provides that when appointment of the Interim Resolution Professional is delayed, the Interim Resolution Professional shall perform the functions of the Resolution Professional from the fortieth day of the insolvency commencement date till a Resolution Professional is appointed under Section 22. Regulation 17(3) cannot be read in a manner which may have effect of defeating the purpose and object of Section 22(5) by allowing the Interim Resolution Professional to continue without there being any order of the Adjudicating Authority in a case where decision has been taken to replace the Interim Resolution Professional. The provision of sub-section (5) of Section 22 requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
