DC: Insolvency Professional cannot charge separate fees

Insolvency and Bankruptcy Board of India, Disciplinary Committee (DC) observed in the matter where Mr. Rajendra K Bhuta an insolvency professional was appointed as IRP (Interim Resolution Professional and Resolution Professional in Corporate Insolvency Resolution Process (CIPR) in the matter of Topsgrup Services and Solutions Limited. But subsequently Mr. Bhuta was replaced, and Inspecting Authority was appointed in the matter and DC asked to share Draft Investigation Report.

As per the findings of the report, the IBBI issues SCN alleging contraventions with the provisions of Insolvency and Bankruptcy Code, 2016 and referred the same to Disciplinary Committee for further proceedings as per the code and regulations.

According to the contraventions, DC observes that resolution process includes the complete expenses and fees of the IPR/RP, and the fee is payable after ratification by the CoC. The approval which is made by the CoC is a process and a mechanism for keeping track/check on the expenses done by the IRP/RP.

Whereas in this matter IRP/RP has unilaterally fixed an arbitrary amount as fee for the verification of claims of the creditors to be borne by them which is separate from the fees given to the IPR/RP on the approval of CoC.

Hence it is concluded that Mr. Bhuta has failed to comply with the provisions of the Code and Regulations. According to the order, IPR/RP Mr. Bhuta is directed to refund. He has to refund the amount of Rs. 1,10,000 received as verification fees within 45 days.

It is summarized that IRP/RP cannot charge separate fees for the duties performed because consolidated fees are already being allowed and paid as per the approval of CoC.

For any query/registration/advisory related to GST, Company, Taxation laws, and Updates, Kindly visit www.onfiling.com

Contact: +91 9599935573

Please follow and like us:

Leave a Comment