Dstr Infrastructure & Projects Llp vs Dharm Vir Gupta
- CitationCompany Appeal (AT) (Insolvency) No. 962 of 2020
Ratio decidendi
The rule this decision rests on
The fee and expenses claimed by a Resolution Professional under the Insolvency and Bankruptcy Code are subject to appellate scrutiny for reasonableness, and a claim that is disproportionate to the settlement amount realised in the process, and that is inflated relative to the duration of the professional's work, may be reduced to an amount commensurate with the nature of the duties performed and the expenses reasonably incurred.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
DSTR Infrastructure & Projects LLP ....Appellant Vs. Dharm Vir Gupta ....Respondent
Present:
Appellant: Mr. Vishnu Kumar and Mr. Ilam Paridi, Advocates.
ORDER
(Through Virtual Mode)
09.11.2020: In terms of the un-dated impugned order which appears to
have been passed in September, 2020, the Adjudicating Authority (National
Company Law Tribunal), New Delhi, Court-IV has reduced the claim of the
Resolution Professional for the dues claimed by him during the Corporate
Insolvency Resolution Process of 'DSTR Infrastructure & Projects LLP'-
('Corporate Debtor') from claimed amount of Rs.3,80,000 to Rs.2,50,000/-,
having regard to the fact that the Resolution Professional discharged duties for
a period which was slightly below two months. Together with the expenses
incurred by the Resolution Professional, the Adjudicating Authority allowed his
claim at Rs.4,27,143/- which is assailed as being exorbitant, having regard to
the fact that the claim of the Operational Creditor has been settled at Rs.12.5
Lakh which includes the fee of the Interim Resolution Professional.
Contd/-............
-2-
Be that as it may, it cannot be disputed that the claim on account of fee
and the expenses incurred by the Resolution Professional is on a higher side
when the amount of settlement is taken into account as it roughly works out to
around 35%. The inflated fee claimed for discharge of professional duties by the
Resolution Professional, more so when the constitution of the Committee of
Creditors was stayed and the expenses incurred being disproportionate, the
amount allowed cannot be justified. Same requires interference.
Having regard to all the relevant factors, we are of the considered opinion
that an amount of Rs. 3,00,000/- will be commensurate with the nature of duties
performed by the Resolution Professional and the expenses incurred in the wake
of constitution of the Committee of Creditors stayed by this Appellate Tribunal,
to be paid to the Resolution Professional. With the aforesaid reduction, the
appeal is disposed of.
[Justice Bansi Lal Bhat] Acting Chairperson
[Justice Anant Bijay Singh] Member (Judicial)
[Shreesha Merla] Member (Technical)
AR/g
Company Appeal (AT) (Insolvency) No. 960 of 2020
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