Muthoot Finance Ltd vs Southern Investments Pvt. Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal(AT) (Insolvency) No. 161 of 2019 IN THE MATTER OF: Muthoot Finance Ltd. ...Appellant Vs Southern Investments Pvt. Ltd. & Ors. ....Respondents

Present: For Appellant: Ms. Priyanka Ghorawat and Mr. Raghav Marwaha, Advocates

For Respondents: Mr. Arshit Ananand and Mr. Ajitesh Soni, Advocates for Respondent No. 1.

Mr. Ishaan George, Advocate for Respondent No. 2.

Mr. Goutham Shivshankar and Mr. Shantanu Singh, Advocates for Respondent No. 3.

ORDER

14.11.2019 Heard learned Counsel for the Appellant. The Appellant claims

that the Appellant was one of the Financial Creditors, who filed claim with the

Interim Resolution Professional when Corporate Insolvency Resolution Process

(in short 'CIRP') was initiated against Southern Investment Private Limited

(Respondent No. 1 - Corporate Debtor). The matter had gone to the Hon'ble

Supreme Court and the Company Petition came to be disposed as per the orders

of Hon'ble Supreme Court in the matter of "Fehmida Shaheen & Ors. Vs. Union

of India & Ors." - W.P.(C) No. 452 of 2018 dated 20th November, 2018 (page-

27). It is stated that in the impugned order, the Adjudicating Authority (National

Company Law Tribunal- Single Bench) Chennai has, on 21.01.2019, directed the

Appellant to pay Rs. 6,61,200/- as share of the Appellant towards remuneration

of the Interim Resolution Professional/Resolution Professional (Respondent No.

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2). The contention of the learned Counsel is that the Appellant was only a

Financial Creditor, who filed claim and was part of Committee of Creditors (in

short 'CoC') and liability to pay remuneration does not come from Appellant.

When Corporate Debtor is available, the Corporate Debtor should have been

directed to pay the amount towards remuneration.

2. Learned Counsel for the Respondent No. 2- Resolution Professional refers

to his reply filed vide diary No. 11485 wherein all details are recorded as to the

developments which took place in the CIRP. It is pointed out that in decision

taken on 25.04.2018, the first meeting of CoC (Annexure-A2 of the Reply

Affidavit), the fee of the Resolution Professional was fixed. Learned Counsel has

referred to the Insolvency and Bankruptcy Board of India (Insolvency Resolution

Process for Corporate Persons) Regulation, 2016 as reproduced in Reply. He also

referred to the reply affidavit for the procedure followed in such proceedings. It

is stated that the CoC takes the decision with regard to fees to be paid to Interim

Resolution Professional/Resolution Professional which initially CoC members

contribute in proportion of their voting share and the same procedure was

followed in the present matter. It is argued that other than the Appellant, no

other CoC member has raised any question regarding initial contribution

towards fees and have paid their shares. The fee paid by the Financial Creditors

is recoverable by the Financial Creditor from the Corporate Debtor. The fees of

Interim Resolution Professional cannot be left in suspense and the IBC ensures

priority to the payment of fees of Interim Resolution Professional/Resolution

Professional.

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3. Learned Counsel for the Appellant submits that the Appellant was merely

a member of CoC and in the present case has not benefitted anything but is

saddled with the burden of payment and then recovery.

4. In response, the learned Counsel for the Resolution Professional - R2 is

submitting that the record shows that various benefits have accrued to the

Appellant because of the CIRP where even agreements were entered letting the

Appellant retain some flats and the Appellant cannot say that he has not been

benefitted anything from the process.

5. We are not concerned whether the Appellant benefitted or not. Under

Section 25(2)(c) of Insolvency and Bankruptcy Code, 2016, it is the duty of the

Resolution Professional to take actions during CIRP to raise interim finances

subject to the approval of the CoC under Section 28. When it is shown in the

present matter that CoC has fixed fees and other members of CoC have

contributed towards fees of the Resolution Professional in proportion of their

voting shares, the Appellant cannot be heard saying that it will not contribute

especially when the same is recoverable.

6. In the facts of the matter, we do not find any error with the impugned order

directing the Appellant to first pay and then make recovery from the Corporate

Debtor. In the circumstances, we do not interfere with the impugned order.

Appeal is dismissed.

[Justice A.I.S. Cheema] Member (Judicial)

(Kanthi Narahari) Member(Technical) Akc/Md

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