Case Note & Summary
The case involves an appeal by Mathioli N, the Resolution Professional (RP) of MQ Networks Private Limited, against an order dated 07.07.2025 passed by the NCLT, Chennai Bench – II in IA(IBC)/917/CHE/2025 in CP(IB)/188/CHE/2023. The impugned order rejected the RP's claim for fees without hearing him. The RP argued that the order violated principles of natural justice as it had civil consequences and was passed without following proper procedure. The respondent, Reliance Asset Reconstruction Company Limited, opposed the appeal. The NCLAT found that the NCLT had not afforded the RP an opportunity of hearing before passing the order, which was a serious procedural irregularity. The NCLAT set aside the impugned order and remanded the matter back to the NCLT for fresh consideration on merits, directing that the RP be heard. The NCLAT also noted that the RP's fee, being part of CIRP costs, has priority under Section 53 of the IBC. The appeal was allowed with no order as to costs.
Headnote
A) Insolvency Law - Resolution Professional's Fee - Natural Justice - IBC, 2016 - Sections 53, 30 - The NCLT passed an order rejecting the RP's fee claim without affording him an opportunity of hearing, which had civil consequences. The NCLAT held that the order was in violation of principles of natural justice and set it aside, directing the NCLT to reconsider the fee claim on merits after hearing the RP. (Paras 1-12) B) Insolvency Law - CIRP Costs - Priority of Payment - IBC, 2016 - Section 53 - The NCLAT observed that the RP's fee, being part of CIRP costs, has priority in distribution under Section 53. The NCLT was directed to examine the fee claim in accordance with law. (Paras 8-12)
Issue of Consideration
Whether the NCLT order rejecting the Resolution Professional's fee claim without hearing him was violative of natural justice and whether the fee claim should be considered as CIRP cost.
Final Decision
The NCLAT allowed the appeal, set aside the impugned order dated 07.07.2025, and remanded the matter back to the NCLT for fresh consideration on merits after affording an opportunity of hearing to the RP. No order as to costs.
Law Points
- Principles of Natural Justice
- Resolution Professional's fee entitlement
- CIRP costs
- IBC Section 53
- IBC Section 30
