IBBI disposes off SCN issued to an IP as efforts were made to maximize value and fee was reasonably charged

Case Details: Ms. Charu Sandeep Desai, In re [2021] 132 taxmann.com 49 (IBBI)

Judiciary and Counsel Details

• • Dr. Mukulita Vijayawargiya, Whole Time Member, IBBI

Facts of the Case

An Insolvency Professional (IP) is obliged under section 208(2)(a) and (e) to take reasonable care and diligence while performing her duties, including incurring expenses and to perform duties in a manner specified by IBBI,

In addition, she must, therefore, ensure that not only fee paid to professionals is reasonable, but also other expenses incurred by her are reasonable so that corporate debtor, who is already entangled in a web of unsustainable liabilities is not further over-burdened with exorbitantly high Insolvency Resolution Process Cost (IRPC).

IBBI Held

Therefore, where IP appointed as Resolution Professional (RP) for Corporate Insolvency Resolution Process (CIRP) in a matter of ‘M’ had performed activities to maximize the value of corporate debtor and fees charged and expenses incurred were found to be reasonable and there appeared to be no contravention of provisions of Code or Regulations made thereunder, show cause notice issued to IP was to be disposed of with a warning to IP to take reasonable care and be extremely careful and diligent while performing her duties under Code.