Newogrowth Credit Pvt Ltd vs Resolution Professional Bhaskar ...
- CitationCompany Appeal (AT) (Insolvency) No. 1053 of 2020
Ratio decidendi
The rule this decision rests on
A member of the Committee of Creditors who is liable to share the costs of the corporate insolvency resolution process is not liable for CIRP costs incurred during the period when it was validly excluded from the Committee, and such costs must be excluded from the computation of its proportionate share. Where the Adjudicating Authority has apportioned CIRP costs by reference to a creditor's share, the apportionment is to be computed on the basis of the period during which the creditor was actually a participant in the process, so that costs attributable to a period of exclusion are removed before the share payable is fixed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Newogrowth Credit Pvt. Ltd. ....Appellant Vs. Resolution Professional, Bhaskar Marine Services ....Respondents Pvt. Ltd. & Ors.
Present:
Appellant: Mr. Manish Gupta, Ms. Srishti Juneja, Mr. Sampurna, Advocates. Respondents: Mr. Nipun Gautam, Mr. Kanishk Khetan, Advocates for R1. Mr. Sudershan Gupta, RP
ORDER
(Through Virtual Mode)
10.12.2020: This appeal has been preferred by 'Newogrowth Credit Pvt.
Ltd.', a member of the Committee of Creditors assailing the impugned order
dated 12th October, 2020 passed by the Adjudicating Authority (National
Company Law Tribunal), New Delhi, Special Bench, Court VI in IA No. 2357 of
2020 in CP (IB) NO. 2832/ND/2019 by virtue whereof the Appellant has been
directed to bear 27% of the Corporate Insolvency Resolution Process (CIRP) costs
as per its share. The order is assailed on the ground that the Appellant had
withdrawn its claim and such withdrawal had been permitted by the Resolution
Professional. Reference in this regard is made to Annexure A7 at page
Contd/-..........
-2-
78 of the appeal paper book. However, Mr. Nipun Gautam, Advocate representing
the Resolution Professional submits that the decision of the Resolution
Professional allowing withdrawal of claim was subsequently set aside by the
Adjudicating Authority which directed inclusion of the Appellant in the
Committee of Creditors and the Appellant did actually and factually participate
in the meeting of the Committee of Creditors.
2. After hearing learned counsel for the parties, we find that the direction in
terms of the impugned order slapping Appellant with liability to bear 27% of the
CIRP cost is backed by the documentary evidence besides being in consonance
with and proportionate to the share of the Appellant. Therefore, the contention
of same being arbitrary or unreasonable cannot be entertained. However, it
appears that the computation of the cost has not taken into consideration the
period of exclusion of Appellant from the CIRP viz. the period from 5th February,
2020 (when its claim was allowed to be withdrawn) to 10th July, 2020 (when it
was a part of the Committee of Creditors). The CIRP costs for such period have
to be excluded as the Appellant cannot be held in any manner liable to bear the
same. After such exclusion, learned counsel at the Bar agreed that the amount
comes to Rs.1,16,000/- which is due and payable.
3. We accordingly modify the impugned order to the extent indicated
hereinabove. The Appellant shall pay the amount of Rs.1,16,000/- as share of
Company Appeal (AT) (Insolvency) No. 1053 of 2020 -3-
its CIRP costs within 10 days. The appeal is accordingly disposed off.
A copy of this order be communicated to the Adjudicating Authority for
information.
[Justice Bansi Lal Bhat] Acting Chairperson
[Dr. Ashok Kumar Mishra] Member (Technical)
[Shreesha Merla] Member (Technical)
AR/g
Company Appeal (AT) (Insolvency) No. 1053 of 2020
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