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Alok Kaushik v. Mrs Bhuvaneshwari Ramanathan and Others

Civil Appeal · 2021 INSC 184Decided 15 Mar 2021
Civil Appeal No. 4065 of 2020
Dr. Justice D.Y. Chandrachud · Justice M.R. Shah

Background

Alok Kaushik was appointed as a registered valuer to value the plant and machinery of a company, Kavveri Telecom Infrastructure Limited, after it entered the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code. His fee was ratified by the Committee of Creditors, but before he could be paid in full, the National Company Law Appellate Tribunal (NCLAT) set aside the CIRP itself and remitted the question of costs to the National Company Law Tribunal (NCLT). The NCLT then refused to decide Kaushik's fee claim, holding it had become "functus officio" (lacking further power to act), and the NCLAT upheld that refusal, leaving him with only a fraction of the agreed fee paid.

Decision Breakdown

The Supreme Court held that the NCLT was wrong to treat itself as functus officio: under Section 60(5)(c) of the IBC, the NCLT/NCLAT retains jurisdiction over any question arising out of or relating to the insolvency resolution process, and a valuer's fee claim for work genuinely done during the CIRP falls squarely within that scope even after the CIRP itself is later set aside. The Court also clarified that the existence of a separate IBBI grievance-redressal mechanism against resolution professionals (Sections 217-220 IBC) is meant to penalise misconduct, not to decide payment claims of other professionals, so it does not oust the NCLT's jurisdiction to fix such fees as part of insolvency resolution process costs. It set aside both NCLAT and NCLT orders and remitted the matter to the NCLT to determine, as a factual matter, how much was actually owed to the appellant for the work done.

Lesson Learnt

Professionals engaged during a company's insolvency process do not lose their right to be paid for work genuinely performed merely because the insolvency proceeding is later reversed: the insolvency tribunal remains the proper forum to decide and fix such dues as part of the process costs.

Official source (sci.gov.in)View Judgment (PDF)

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