The Supreme Court has upheld an order passed by the National Company Law Appellate Tribunal (NCLAT) directing an Operational Creditor to pay the CIRP costs and fees after the dismissal of his insolvency plea in the case of Rajkumar Brothers and Production Private Limited v. Harish Amilineni Shareholder and erstwhile Director of Amilionn Technologies Private Limited and Another, REED 2021 SC 1316.
Dismissing the appeal filed by the Operational Creditor, a two-Judge Bench comprising of of Justices Indira Banerjee and Sanjiv Khanna observed, "The Respondent (Corporate Debtor) having succeeded, cannot be saddled with the costs of the Corporate Insolvency Resolution Process (CIRP) initiated at the behest of the Appellant or with the fees of the Interim Resolution Professional (IRP)."
The Appellant (Operational Creditor) had filed a petition under Section 9 of IBC before the National Company Law Tribunal (NCLT) Hyderabad in January 2020. The NCLT Hyderabad admitted the petition observing that the claim of the Appellant (Operational Creditor) was undisputed. Aggrieved by the order, the Respondent/Corporate Debtor filed an appeal before the NCLAT New Delhi.
The NCLAT New Delhi set aside the order of NCLT Hyderabad, holding that there were pre-existing disputes between the Respondent and the Appellant. This finding was based on various documents.
The Appellant challenged the order only to the extent of the direction which directed the Appellant/Operational Creditor to pay CIRP costs and fees.
The Supreme Court observed that the direction was in the nature of costs of the proceedings which were found to be unsustainable in law. Stating that the direction did not warrant interference, the Supreme Court dismissed the appeal against NCLAT order.
Advocates Abhishek Kumar, Garima Prashad, Ankita Pandey, Imtiyaz appeared for the Appellant. The Respondent was represented by Advocate Raavi Yogesh Venkata.
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