Introduction

The case of Alok Kaushik v. Bhuvaneshwari Ramanathan And Others (2021 INSC 184) addresses critical issues surrounding the jurisdiction of the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant, Alok Kaushik, a registered valuer, sought remuneration for his services during the Corporate Insolvency Resolution Process (CIRP) of Kavveri Telecom Infrastructure Ltd., a corporate debtor. The primary contention was whether NCLT retains the authority to determine the valuer's fees even after the CIRP is set aside by the National Company Law Appellate Tribunal (NCLAT).

Summary of the Judgment

The Supreme Court of India reviewed the proceedings where the NCLT had initially dismissed the valuer's claim for unpaid fees after setting aside the CIRP for Kavveri Telecom Infrastructure Ltd. The NCLAT had upheld the NCLT's dismissal, leading the valuer to approach the Supreme Court. The apex court held that NCLT possesses the jurisdiction under Section 60(5)(c) of the IBC to determine fees payable to professionals like registered valuers, even if the CIRP is subsequently set aside. The Supreme Court emphasized that such claims are intrinsically linked to the CIRP costs and fall within the purview of NCLT's adjudicating authority.

Analysis

Precedents Cited

The judgment references the Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta (2021) 7 SCC 209 case, where the Supreme Court elucidated the jurisdiction of NCLT and NCLAT under Section 60(5)(c) of the IBC. The Court in Gujarat Urja Vikas Nigam Ltd. underscored that NCLT is a single forum intended to handle all insolvency-related disputes, ensuring that the nexus with the corporate debtor's insolvency is maintained. This precedent was pivotal in reinforcing the Court's stance in the Alok Kaushik case, establishing that NCLT's jurisdiction encompasses the determination of professional fees related to the CIRP.

Legal Reasoning

The Supreme Court's reasoning centered on the interpretation of Section 60(5)(c) of the IBC, which grants NCLT the jurisdiction to adjudicate disputes arising from the insolvency of a corporate debtor. The valuer's claim was directly linked to services rendered during the CIRP, categorizing it under "insolvency resolution process costs" as defined in Section 5(13) of the IBC and further detailed in Regulation 31 of the Insolvency Resolution Process Regulations, 2016.

The Court observed that the dismissal of the valuer's claim by NCLT as being functus officio was a misapplication of its authority. Instead, NCLT retains the competency to assess and determine the rightful remuneration for services that are an integral part of the CIRP, irrespective of the CIRP's eventual outcomes.

Impact

This judgment fortifies the NCLT's role as the central adjudicating body for all insolvency-related disputes under the IBC. It clarifies that professionals engaged during the CIRP, such as registered valuers, have their claims for fees and expenses addressed within the insolvency framework, even if the CIRP does not culminate in a successful resolution. This ensures that professionals are assured of due remuneration, thereby promoting transparency and accountability within the insolvency resolution process.

Complex Concepts Simplified

Conclusion

The Supreme Court's decision in Alok Kaushik v. Bhuvaneshwari Ramanathan And Others reaffirms the comprehensive jurisdiction of NCLT in overseeing and determining all aspects of the CIRP, including the remuneration of professionals involved. By ensuring that professionals like registered valuers are compensated for their services, the judgment promotes the integrity and effectiveness of the insolvency resolution framework under the IBC. This landmark decision not only provides clarity on the procedural aspects but also enhances the overall confidence of stakeholders in the insolvency adjudication process.