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Operational Creditor to bear CIRP Cost and IRP fees, following dismissal of Insolvency Application

The Supreme Court 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 01516 upheld the order of NCLAT directing the Operational Creditor to pay the Corporate Insolvency Resolution Process (“CIRP”) Cost and Interim Resolution Professional (IRP) fees following the dismissal of its Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016.

By an Order dated 9th January, 2020, the NCLT admitted the petition filed by the Operational Creditor (Appellant) under Section 9 of IBC observing that its claim was undisputed. Aggrieved thereof, the Respondent filed above mentioned appeal before the NCLAT that set aside the order of the NCLT, holding that there were pre-existing disputes between the Respondent and the Appellant. The aforesaid finding was based on various documents. In the present appeal, the Appellant has challenged the order of NCLAT only to the extent of the direction in paragraph 8(C) thereof, which has ordered the IRP to place particulars regarding CIRP costs and fees before the Adjudicating Authority that after examining it will direct the Operational Creditor to pay the same in time to be specified by the Adjudicating Authority.

The Supreme Court noted that the Respondent having succeeded in dismissing the Application filed by Appellant before the NCLAT cannot be saddled with the costs of the CIRP initiated at the behest of the Appellant or with the fees of the IRP. Hence, the Court concluded that the direction given by NCLAT does not warrant interference and accordingly, dismissed the present appeal.

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