Tribunal directs liquidator to pay Advocate Roshan Totla professional fees based on actual hearings, rejecting Stakeholders Consultation Committee’s cap and conditional adjustment against court fee refunds.
In a significant judgment delivered on September 11, 2026, the National Company Law Tribunal (NCLT), Mumbai Bench, addressed the contentious issue of professional fees payable to legal professionals during the Corporate Insolvency Resolution Process (CIRP) and liquidation period under the Insolvency and Bankruptcy Code, 2016 (“the Code”). The case, Roshan Raghunath Totla v. Vikas Prakash Gupta, revolved around the claim of Advocate Roshan Totla for outstanding retainership fees from the corporate debtor, M/s. Abhay Nutrition Pvt. Ltd., spanning the CIRP and liquidation phases.
The corporate debtor was admitted into CIRP on April 2, 2019, and subsequently ordered into liquidation on February 7, 2020, with Vikas Prakash Gupta appointed as Interim Resolution Professional and later as Liquidator. Advocate Totla claimed retainership fees of INR 40,000 per month from April 2019 to December 2021, amounting to a total of INR 13,20,000, for legal services rendered throughout the CIRP and liquidation periods. The fees were unpaid despite continuous services including representation in various litigations.
The liquidator and the Stakeholders Consultation Committee (SCC) contested the claim, highlighting the absence of an engagement or appointment letter explicitly authorizing the applicant’s services post-CIRP commencement. The SCC, after reviewing documents and hearing attendance, approved payment on a per-hearing basis — INR 2,500 for each effective hearing and INR 1,000 for non-effective hearings — subject to a maximum cap of INR 5,50,000. Further, the SCC resolved that fees payable would be adjusted against any refund of court fees arising from withdrawals or closures of cases. Advocate Totla agreed to this arrangement but contested the cap and conditionality.
The Tribunal examined the matter in detail and observed that:
- - Under the Code and related regulations, all expenses during CIRP must be approved or ratified by the Committee of Creditors (CoC), and similarly, liquidation costs require SCC approval.
- - The applicant failed to provide conclusive evidence such as an engagement letter or ratification by the CoC for the retainership fees claimed at INR 40,000 per month.
- - The legal services rendered during CIRP and liquidation, although continued without explicit instructions from the RP or Liquidator, were acknowledged.
- - The SCC's resolution to cap the fees and adjust payments against court fee refunds was deemed unreasonable. The Supreme Court’s precedent in Jage Ram v. Ved Kaur (2025) was cited to clarify that court fee refunds are available only under limited statutory circumstances and cannot be a basis to withhold professional fees.
- - The Tribunal emphasized that professional fees must be commensurate with the efforts and services rendered and cannot be arbitrarily capped or made contingent upon unrelated refunds.
Consequently, the NCLT partially allowed the application, directing the liquidator to release payment to Advocate Totla based on the number of effective and non-effective hearings he attended without enforcing the cap of INR 5,50,000 or adjusting fees against any court fee refunds. The advocate is required to submit evidence supporting the hearings attended to facilitate payment.
This ruling reinforces the principle that professional fees during insolvency processes should reflect actual work done and cannot be limited by arbitrary monetary ceilings or conditioned on unrelated financial recoveries. It also clarifies the procedural requirements for fee approval under the Insolvency and Bankruptcy Code and associated regulations.
The case sets an important precedent for legal professionals engaged in insolvency proceedings, ensuring fair remuneration for services rendered in complex and extended corporate resolution scenarios.
Bottom Line:
Professional fees for legal services rendered during CIRP and liquidation period cannot be capped arbitrarily, and payment should not be made contingent upon the refund of court fees.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 - Sections 5(13), 53, 60(5); IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - Regulation 31; IBBI (Liquidation Process) Regulations, 2016 - Regulation 31A
Roshan Raghunath Totla v. Vikas Prakash Gupta, (NCLT)(Mumbai Bench) : Law Finder Doc Id # 2977889
