NCLT Bengaluru: RP Cannot Claim Fees During Stay of CIRP; Only ₹1.5 Lakh Allowed for Pre-Stay Work
Pranav B Prem
The National Company Law Tribunal (NCLT), Bengaluru Bench, has ruled that an Interim Resolution Professional (IRP) or Resolution Professional (RP) is not entitled to fees or expenses incurred during the period when Corporate Insolvency Resolution Process (CIRP) proceedings are stayed by the NCLAT or any judicial forum. The Bench comprising Sunil Kumar Aggarwal (Member-Judicial) and Radhakrishna Sreepada (Member-Technical) delivered the order on September 12, 2025, while partly allowing an application filed by Ms. R. Bhuvaneshwari, who had been appointed IRP for Mindlogicx Infratech Private Limited.
Background
The CIRP was initiated against the corporate debtor on June 9, 2023, upon admission of a Section 7 petition filed by Union Bank of India. Ms. R. Bhuvaneshwari was appointed as the IRP. However, within a week, the NCLAT stayed the CIRP on June 16, 2023. While the appeal before NCLAT was pending, the parties negotiated a one-time settlement (OTS), and the bank issued a loan closure letter acknowledging full repayment. In view of the settlement, the NCLAT disposed of the appeal on October 3, 2024, closing the CIRP.
Subsequently, the IRP filed an application before NCLT seeking directions for payment of ₹10,67,923, comprising her professional fees of ₹9,74,950 and legal expenses of ₹92,973. She also sought directions to the financial creditor to file Form FA as a precondition for withdrawal of the petition.
Contentions
The IRP argued that even though the CIRP was stayed and later closed due to settlement, the CIRP costs, including professional fees, were still payable under Section 12A of the IBC. She submitted that withdrawal requires full payment of costs and insisted on filing of Form FA to comply with statutory requirements.
The corporate debtor, on the other hand, contended that since the CIRP was stayed within one week and no Committee of Creditors (CoC) was ever constituted, no substantive work was done by the IRP after the stay. Therefore, she was not entitled to fees beyond that period. The debtor further submitted that the NCLAT’s closure order did not amount to withdrawal under Section 12A, making Form FA unnecessary.
NCLT’s Observations
The Tribunal noted that once a stay is granted by the NCLAT, the IRP/RP is prohibited from taking further steps in the CIRP. “When no action is taken then the corollary is that no fees is payable,” the Bench observed. It further held that since the CIRP was closed by the NCLAT on October 3, 2024, the IRP’s role came to an end and no payment could be claimed for the period thereafter. The Bench also clarified that closure of proceedings on account of settlement did not amount to withdrawal of the application, and therefore filing of Form FA was not necessary.
The Tribunal examined the activities carried out by the IRP during the short window between admission (June 9, 2023) and stay (June 16, 2023). It found that the IRP had issued a public announcement published in newspapers on June 14, 2023. Considering this, the Bench awarded a lump sum of ₹1,50,000, including GST, as reasonable remuneration for the work actually done. Accordingly, the Tribunal directed the corporate debtor to pay this amount within two weeks and partly allowed the application, rejecting the remainder of the claim.
The NCLT Bengaluru has thus made clear that an IRP/RP cannot claim professional fees or expenses for periods when CIRP proceedings are stayed or after they are closed by judicial orders. Only work demonstrably performed before the stay can be compensated, as in the present case, where the IRP was awarded ₹1.5 lakh against her claim of over ₹10.6 lakh.
Appearance
For the RP: Shri. Srinandan.K
For Respondent: Shri Naveen Naika
Cause Title: Ms. R. Bhuvaneshwari, Interim Resolution Professional of Mindlogicx Infratec Ltd. v. Union Bank of India.
Case No: I.A. No. 586/2025 in C.P. (IB) No. 126/BB/2022
Coram: Sunil Kumar Aggarwal (Member-Judicial), Radhakrishna Sreepada (Member-Technical)
