Sudha Pravin Navandar vs Nalin Virji Shah & Ors

Sudha Pravin Navandar, ...Appellant(s) IRP of Shah Group Builders Ltd.

Versus

Nalin Virji Shah & Ors. ...Respondent(s) Present: For Appellant : Ms. Anjali Sharma, Ms. Thanglunkim, Advocates. For Respondents : Mr. Sagar Bansal, Mr. Dhruv Parwal, Advocates. Ms. Sudha Navandar.

ORDER

(Hybrid Mode) 26.05.2025: This appeal is directed against the order dated

20.10.2023 by which an application bearing IA No. 2321/MB/C-IV/2023

filed in CP (IB) 2207/MB/C-IV/2019 by the Interim Resolution Professional

(IRP), invoking Rule 11 of NCLT Rules, 2016 for release of the professional

fee and Corporate Insolvency Resolution Process (CIRP) expense to the tune

of Rs. 93,78, 920/- and Legal Cost of Rs. 40, 000/- by the Respondents has

been disposed of, restricting it to an amount of Rs. 20 lakhs plus GST plus

expenses which has been ordered to be paid to the applicant.

2. One Satish Sadashiv Rane (FC) filed an application under Section 7

of the IBC, 2016 against the Shah Group Buliders Ltd. (SGBL) (CD) bearing

CP (IB) No. 2207/ MB/C-IV/2019 before the National Company Law

Tribunal, Mumbai Bench for the Resolution of their debt which was admitted on 08.07.2021 and the applicant/appellant namely, Sudha Pravin

Navandar, was appointed as the IRP.

3. The order of admission was challenged before this court by way of

CA (AT) (Ins) No. 558 of 2021 in which stay was granted on 06.08.2021 to

the effect that the IRP shall not constitute the CoC.

4. During the pendency of the appeal, a settlement took place between

the Suspended Director of the Corporate Debtor and the Financial Creditor

on 20.09.2021. Pursuant to which the IRP filed FA on 23.09.2021.

5. The application filed under Section 12A was numbered as IA No.

2209 of 2021. It was allowed on 17.03.2023. As a result of which the CIRP

proceedings initiated on 08.07.2021 came to an end.

6. Counsel for the appellant has alleged that it was provided in the

agreement dated 20.09.2021 that the Corporate Debtor shall pay the fee and

expenses incurred by the IRP.

7. Thereafter the appellant filed IA No. 1670/2022 for reimbursement

of the fee and other CIRP cost in terms of the order passed on 17.03.2023.

The said application was disposed of on 17.03.2023 in which it was held

that the fee and the CIRP cost of the applicant/appellant shall be paid by

the Corporate Debtor.

8. In the meantime, a handover of documents of Shah Group Builders

Ltd. was entered into (agreement) as per which the appellant handed over

the Corporate Debtor to the Promoters as a going concern. According to the

appellant, it was decided therein as under:

"F. As per the order dated 17.03.2023, the CIRP Cost and IRP's fee outstanding till 28-02-2023 of Rs. 90,90,626 is to be paid by the Corporate Debtor and the schedule of the same is confirmed by Directors of SGBL.

Further, as per para k "settlement and payment Modalities" of the Settlement agreement dated 20th September, 2021 it was agreed that cost and expenses shall be borne by the Corporate Debtor till disposal of 12A application.

Hence, in addition to aforementioned amount, proportionate fees of Rs. 2,91,194/- for the month of March till 17-03-2023 i.e. the date of pronouncement of order needs to be paid.

Summary of the payment to be made:

Particulars Amount in Rs.

As per the approved detailed written 90,90,626 submission attached herewith Proportionate Fees for the Month of 2,91,194 March i.e., till 17-03-2023 Total Fees and Expenses to be paid 93,81,820

(iii) The Directors of SGBL undertakes to pay CIRP Cost and IRP's fee amounting to Rs. 93,81,820/- within 7 days from execution of this Agreement in accordance to said order".

9. Since the amount due to the appellant was not paid, therefore, the

appellant file IA No. 2321/MB/C-IV/2023, claiming the amount of Rs.

93,78, 920/- and Legal Cost of Rs. 40, 000/- from the Respondent. In this

application the Tribunal passed an interim order on 10.08.2023 which read

as under:

"1. Mr. Devarajan Raman, Ld. Counsel a/w Ms. Sudha N., IRP are present in IA- 2321/2023. Mr. Pulkit Sharma a/w Komal Patel i/b J Nishar & Co., Ld. Counsel for the Respondent present.

2.The Corporate Debtor is directed to pay the expenses, which pending to be reimbursed, and Rs. 20 lakhs plus GST thereon, as applicable, towards part of the professional fees within 15 days. The Applicant shall file necessary evidence(s) supporting her claim for verification of the Corporate Debtor, if not provided earlier.

3.List this matter for further consideration on 07.09.2023".

10. According to the appellant, the interim order was passed for

payment of Rs. 20 lakhs plus GST, part of the professional fee claimed by

the appellant during the pendency of the main application. However, as per

the appellant even this amount has not been paid so far.

11. The Ld. Tribunal, then passed the impugned order on 20.10.2023

and in the findings recorded it has been observed in paragraph 10 deeply.

"10. This bench notices that in view of the sequence of events no substantial professional work was done by the IRP after the date of settlement and the fee demanded by the IRP is neither fair and just nor reasonable".

12. It is also observed that since Rs. 20 lakhs was ordered to be paid

on 10.08.2023, therefore, the claim of the appellant is restricted to the

amount of Rs. 20 lakhs only plus GST and expenses without giving any

reason as to why the entire amount is not to be paid.

13. Counsel for the appellant has submitted that the impugned order is

totally non-speaking and it violates the Principles of natural justice because

in paragraph 10, the Tribunal has observed that it has noticed the sequence

of events that no substantial professional work was done by the IRP after the date of settlement but those sequence of events are conspicuous by its

absence in the impugned order.

14. We have specifically asked Counsel for the Respondent in this

regard as to what are those sequence of events which are noticed by the Ld.

Tribunal for the purpose of denying the amount paid by the appellant and

restricted its claim to Rs. 20 lakhs which was ordered to be paid on

10.08.2023 to which he also feigned ignorance.

15. Thus, keeping in view the aforesaid facts and circumstances, we are

satisfied that the impugned order is totally non-speaking which deciding the

application of the appellant in which she has prayed for payment of the

amount due to her on account of services rendered.

16. In such circumstances, it would be just and expedient that the

impugned order be set aside and the matter is remanded back to the Ld.

Tribunal with a direction to decide it again after giving reasons in the order

as to why the appellant is not entitled to Rs. 93,78, 920/- as prayed for.

17. The appeal is thus allowed. Impugned order is set aside. Matter is

remanded back to the Ld. Tribunal. The IA No. 2321/MB/C-IV/2023 which

was disposed of by the impugned order is hereby restored.

18. The parties are directed to appear before the Tribunal on

16.06.2025.

19. Before parting with this order, we make it clear both the Tribunal as

well as the Counsels appearing in this appeal that we have not made any

observation on the merit of the case at all and have left everything to the

Tribunal to decide. The IA's if any pending are hereby closed.

20. Parties to bear their own cost.

21. The Tribunal is also requested to decide the application as early as

possible preferably within the period of 2 months from the date of

appearance of the parties.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Naresh Salecha] Member (Technical) sr/rr