The Ahmedabad Bench of NCLT affirms the entitlement of a Resolution Professional to receive professional remuneration for statutory duties performed during CIRP, notwithstanding liquidation application filings.
In a significant judgment, the National Company Law Tribunal (NCLT) Ahmedabad Bench, comprising Member (Judicial) Sh. Shammi Khan and Member (Technical) Sh. Sanjeev Sharma, delivered a decision on July 30, 2026, clarifying the entitlement of a Resolution Professional (RP) to receive professional remuneration during the Corporate Insolvency Resolution Process (CIRP) and subsequent liquidation proceedings. The case, Sachin Naveen Sinha v. Mr. Arvind Gaudana, dealt with the complexities of remuneration claims by Mr. Sachin Naveen Sinha, the erstwhile RP of Spel Granito Private Limited.
The judgment addressed the central issue of whether the RP's entitlement to professional remuneration ceases upon the filing of a liquidation application. The Tribunal held that the entitlement does not automatically terminate if the application is subsequently withdrawn and the CIRP continues uninterrupted. Mr. Sinha was found entitled to remuneration for the period during which he discharged his statutory duties until the liquidation order was passed.
Mr. Sinha, who assumed charge as RP on October 20, 2023, had sought payment for his services, which included preserving the corporate debtor's assets, coordinating with stakeholders, and handling CIRP costs. Despite part payments, a significant portion of his remuneration remained unpaid, leading to the current application seeking relief.
The Tribunal acknowledged the complexities involved, especially given the withdrawal of the first liquidation application and the subsequent continuation of the CIRP. It emphasized that the filing of the liquidation application alone does not invalidate the RP's claim to remuneration, as statutory duties continued to be discharged. The judgment also reiterated the statutory priority given to Insolvency Resolution Process Costs under the Insolvency and Bankruptcy Code, 2016.
The Tribunal directed the respondents, including Axis Bank Limited, to verify, reconcile, and release any unpaid amounts due to Mr. Sinha for the period from October 10, 2023, to December 31, 2023, and from June 1, 2024, to September 12, 2024. The judgment reinforced the notion that professional fees incurred during the CIRP are prioritized and cannot be retrospectively invalidated by decisions of the Stakeholders' Consultation Committee post-liquidation.
This ruling is expected to have significant implications for insolvency professionals, ensuring that their rightful claims for remuneration are recognized and upheld, even amidst the complexities of liquidation proceedings.
Bottom Line :
Entitlement of a Resolution Professional to professional remuneration during the Corporate Insolvency Resolution Process (CIRP) and subsequent liquidation proceedings.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 5(13), 25, 53(1)(a), 208; Regulation 34B of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Sachin Naveen Sinha v. Mr. Arvind Gaudana, (NCLT)(Ahmedabad) : Law Finder Doc id # 2961372
