Supreme Court orders reasonable assessment of fee by NCLT The Supreme Court has held that the National Company Law Tribunal (NCLT) must make a reasonable assessment of the fees and expenses payable to the Interim Resolution Professional (IRP). It cannot pass an order in an ad-hoc manner. Else, it would amount to abdication. A bench of Justice D Y Chandrachud and Justice A S...
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Supreme Court orders reasonable assessment of fee by NCLT
The Supreme Court has held that the National Company Law Tribunal (NCLT) must make a reasonable assessment of the fees and expenses payable to the Interim Resolution Professional (IRP). It cannot pass an order in an ad-hoc manner. Else, it would amount to abdication.
A bench of Justice D Y Chandrachud and Justice A S Bopanna delivered the judgment. It was deliberating on a dispute related to the payment of costs and expenses incurred by an RP, The court set aside the impugned order and the judgment of the National Company Law Appellate Tribunal (NCLAT) that awarded an ad-hoc amount to the IRP without any consideration of the actual amount due as per the technical and financial bid.
The appellant had been appointed as IRP by an order of NCLT. But, the order was set-aside in the appeal to the NCLAT. The proceedings were remitted to NCLT to decide upon the fees and costs incurred by the appellant to be borne by the respondent (the financial creditor).
The appellant submitted before the Supreme Court that the statement of fee and expenses was in terms of the technical and financial bid. It was claimed that neither NCLAT nor NCLT had conducted any scrutiny of the factual position and merely awarded an ad hoc figure. The appellant argued that there was no application of mind by the adjudicating authorities to the basis of the claim and the figures accepted by the financial creditor.
The top court noted the fact that the appellant had addressed a letter to the respondent in 2019, prior to the filing of the application to which the respondent replied in 2020. The latter had stated that upon verification the cost and fee were found in conformity with both the technical and financial bid.
It also maintained that in the application the appellant annexed a statement of costs, the amount that was reimbursed with the balance dues. Noting that despite the respondent verifying that the costs and fees claimed by the appellant were in conformity with the technical and financial bid, the order of the NCLT had not considered the submission of the appellant.
While noting that both orders "suffered from an abdication in the exercise of the jurisdiction," the apex court remanded it back to NCLT for fresh consideration of the matter.
