Kotak Resources vs Dharmendra Dhelaria & Ors

M/s. Kotak Resources ... Appellant

Versus

Dharmendra Dhelaria & Ors. ...Respondents

Present: For Appellant : Mr. Rasesh Parikh, Advocate

ORDER

(Through Virtual Mode)

26.06.2020 The only issue raised in this appeal preferred by the

'Financial Creditor' - 'M/s. Kotak Resources' is in regard to reimbursement of

the 'corporate insolvency resolution process cost', liability in respect whereof

has been laid by the Adjudicating Authority (National Company Law Tribunal),

Ahmedabad Bench upon 'Committee of Creditors' consisting of the Appellant and

another 'financial creditor' namely 'ARCIL' in equal proportion in terms of the

impugned order dated 24th February, 2020. It is urged on behalf of the Appellant

that the Adjudicating Authority had no jurisdiction to pass the impugned order

and that the Appellant could not be visited with the 'corporate insolvency

resolution process cost' in view of the fact that the 'corporate insolvency

resolution process' was not only for the benefit of the members of the 'Committee

of Creditors'.

2. After hearing the learned counsel for the Appellant, we find that the

impugned order directing the 'Committee of Creditors' consisting of both, 'Kotak

Resources' and 'ARCIL', to reimburse the 'corporate insolvency resolution

process cost' of Rs.12,12,831/- in equal proportion to the 'Resolution 2

Professional' came to be passed on the application of 'Resolution Professional' of

'M/s. Raninga Ispat Private Limited' under Section 60 of the 'Insolvency and

Bankruptcy Code, 2016' ('I&B Code', for short). It further appears that the

'corporate insolvency resolution process' had been initiated on an application

filed under Section 7 of the 'I&B Code' by the Appellant. The Adjudicating

Authority admitted the application by virtue of its order dated 21st February,

2018 and appointed Mr. Dharmendra Dhelaria as the 'Interim Resolution

Professional' who was subsequently appointed as 'Resolution Professional' by

'Committee of Creditors' in its meeting held on 22nd March, 2018. It further

appears that one of the erstwhile Director of the Corporate Debtor preferred an

appeal against the order of admission which came to be allowed by this Appellate

Tribunal vide judgment rendered on 29th August, 2018 setting aside the

impugned order and all consequential actions taken pursuant thereto.

Admittedly, Mr Dharmendra Dhelaria was nominated as 'Interim Resolution

Professional' by the Appellant (Financial Creditor) who was subsequently

confirmed as 'Resolution Professional' by the 'Committee of Creditors'. He

managed the operations of the 'Corporate Debtor' as a going concern. ARCIL

was included in the 'Committee of Creditors' upon its constitution by the

'Resolution Professional' with its consent. The 'resolution cost' of Rs.12,12,831/-

was ratified and approved by the 'Committee of Creditors' in its meeting dated

7th August, 2018. Viewed in this background, it is fallacious to contend that

the Adjudicating Authority lacked jurisdiction to provide for the resolution costs

while closing the case in consequence of the order of admission of application

under Section 7 of the 'I&B Code' being set aside by this Appellate Tribunal in

appeal preferred by the erstwhile Director of the 'Corporate Debtor'. Since the

Company Appeal (AT) (Insolvency) No. 569 of 2020 3

'Committee of Creditors' comprised of both, Appellant and ARCIL, the 'corporate

insolvency resolution process costs' had necessarily to be borne by them in equal

proportion. It is indisputable that the 'Corporate Debtor' could not be saddled

with the liability of the 'corporate insolvency resolution process costs'. It would

be preposterous to hold that the whole amount of the 'corporate insolvency

resolution process cost' should have been reimbursed by the ARCIL alone to the

'Resolution Professional'.

For the forgoing reasons, we are of the considered opinion that the issue

raised in this appeal lacks merit. We find no legal infirmity in the impugned

order. The appeal is dismissed at the very threshold stage.

[ Justice Bansi Lal Bhat ] Acting Chairperson)

[ V.P. Singh ] Member (Technical)

[ Alok Srivastava ] Member (Technical)

/ns/gc/

Company Appeal (AT) (Insolvency) No. 569 of 2020