National Company Law Appellate Tribunal (“NCLAT”) on May 08, 2022 in the matter of Kushwinder Singhal v. Reena Tiwari held that the Committee of Creditors (“CoC”) is fully competent to revise its earlier approved fees of the Resolution Professional (“RP”).

In the instant case, after the initiation of the Corporate Insolvency Resolution Process (“CIRP”) of Bestways Transport India Pvt Ltd. (“Bestways”), COC decided the fees to be paid to Mr. Kushwinder Singhal to function as the Resolution Professional of Bestways but later on the COC passed a resolution to replace Mr. Kushwinder Singhal and appoint Mr. Vijay Kumar Gupta as the RP of Bestways. Subsequently, an application was filed and NCLT vide its order directed the replacement of RP and also directed the reconstituted COC to decide the fees of erstwhile RP. Mr. Kushwinder Singhal was aggrieved by this order of NCLT, Chandigarh and appealed to the NCLAT.

NCLAT observed that the COC passed the resolution to remove the RP and a major portion of the fees claimed by the RP is for the costs which were incurred subsequent to resolution and therefore, it is appropriate to consider the CIRP cost by COC.

NCLAT observed-

“The entitlement of fee depends on several factors including the change of circumstances, the length of CIRP proceeding hence we are of the view that Regulation 12(3) proviso does not fetter the CoC to consider the fee and expenses.”

Hence, NCLAT held that COC is fully competent to revise the fees of RP even if it is already approved by the earlier COC.