CIRP Regulations cover the complete expenses and fees of the IRP/ RP, and this fee is payable after ratification by the CoC. The approval by the CoC of the expenses incurred in the CIRP is a mechanism for keeping a check on the expenditures made by the IRP/ RP. In the present case, the IRP has unilaterally fixed an arbitrary amount as a fee for verification of claims of the creditors to be borne by them, separate from the IRP fees approved by the CoC, thereby going beyond the scope of the Code and the CIRP Regulations made thereunder. It was observed that this collection of separate verification fees from the creditor creates a conflict of interest for the IRP/ RP as it raises a bias towards the creditors who have paid the verification fees and allows for grounds of rejecting a claim if fees are unpaid.
The core duties conferred upon IPs include receiving, collating and verifying claims and IPs can be adequately compensated for performing these duties by being paid a monthly fee as approved by the CoC. Further, an IP can take support by appointing IPEs, accountants, legal or other professionals as may be necessary and include their expenses in the CIRP costs. However, he cannot charge separate fees for each primary duty performed when consolidated fees for his role as IRP/ RP are already being paid.
The Insolvency and Bankruptcy Board of India (IBBI) may take action against an RP for the violation of section 18(b), 208(2)(a) and (e) of the Code, regulation 13(1) of the CIRP Regulations, clause 1, 2, 14, 25 and 26 of the Code of Conduct given in the first schedule of IBBI (Insolvency Professionals) Regulations 2016. The Insolvency and Bankruptcy Board of India (IBBI) may direct the Resolution Professional to refund the amount received as a fee for 'verification of claims' to the respective creditors.
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