Ratified IRP Fee Binding on CoC: NCLAT Affirms ₹9 Lakh Payment to Interim Resolution Professional (IRP)
- REEDLAW
- 1 day ago
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NCLAT held that the ratified fee of ₹9 lakh for the Interim Resolution Professional (IRP) is binding on the Committee of Creditors (CoC) and affirmed the payment as valid and enforceable.
On 8 July 2025, the National Company Law Appellate Tribunal (NCLAT), Chennai Bench comprising Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member), while adjudicating an interlocutory application in a company appeal, held that once the Committee of Creditors (CoC), holding 100% voting share, approves the minutes of its earlier meeting fixing the IRP’s fee and expenses, such approval amounts to valid ratification under Regulation 33(3) of the IBBI Regulations. Consequently, the IRP is entitled to claim the approved amount as part of the CIRP cost. The Appellate Tribunal held that no further express ratification was necessary and dismissed the appeal challenging the IRP’s entitlement.
The National Company Law Appellate Tribunal (NCLAT) dismissed a Company Appeal filed by the sole Financial Creditor, Canara Bank, challenging an order of the Adjudicating Authority directing payment of ₹9,05,058 towards fees and expenses to the erstwhile Interim Resolution Professional (IRP), Respondent No. 1. The dispute arose after the IRP, who was appointed by an order dated 13.05.2022 in the CIRP of M/s. S.V.K. Shipping Services Pvt. Ltd. claimed entitlement to professional fees and expenses incurred during its tenure. The Financial Creditor objected to the direction, arguing that the fee was not validly ratified by the Committee of Creditors (CoC) as required under Regulation 33(3) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
The Appellant contended that the determination of IRP’s fee lacked compliance with mandatory regulatory provisions and therefore could not be sustained. Heavy reliance was placed on Regulation 33(3) and the argument that ratification by the CoC was a precondition for recognising the fee as CIRP cost. According to the Appellant, in the absence of such ratification, the IRP’s fee could not have been approved. The Appellant further relied on the minutes of the 1st and 2nd CoC meetings to argue that no express ratification of the claimed fee took place.
The Tribunal, however, found that the 1st CoC meeting held on 09.06.2022 clearly recorded the IRP’s consent to work for a monthly fee of ₹3,00,000 along with actual expenses. The 2nd CoC meeting held on 13.07.2022, which had the Appellant holding 100% voting rights, approved the minutes of the 1st meeting, thereby effectively ratifying the proposed fee and expenses. The Tribunal emphasised that this ratification, even if implicit, satisfied the regulatory requirement under Regulation 33(3), and therefore the Adjudicating Authority’s order could not be faulted.
The NCLAT further held that the argument of the Appellant that the fee was unilaterally fixed stood contradicted by the meeting records and the Appellant’s own voting consent. Since the CoC had already approved the IRP’s remuneration and expenses by ratifying the earlier meeting minutes, the IRP’s entitlement could not be disputed. Accordingly, the Tribunal upheld the Adjudicating Authority’s direction for payment of ₹9,05,058 to the IRP and dismissed the appeal, finding no irregularity or legal infirmity in the order under challenge. All pending interlocutory applications were closed.
Mr. M. L. Ganesh, Advocate, represented the Appellant.
Mr. Sriram Venkatavaradan, Advocate, appeared for the Respondent No. 1.
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