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The Delhi High Court today directed the Committee of Creditors (CoC) of Bhushan Power and Steel to deposit the amount which was paid to its legal counsel in relation to the company’s corporate insolvency resolution process with the Court’s Registry.
The amount, which is approximately Rs 12 crore, was included in the Insolvency Resolution Process Cost. It has been directed that fee be deposited on or before December 14.
The order was passed a Single Judge Bench of Justice Rajiv Shakdher while hearing a petition by the resolution professional for Bhushan Power and Steel, Mahender Khandelwal, challenging an order by the Insolvency and Bankruptcy Board of India (IBBI).
In a first of its kind order, apart from imposing a penalty of Rs 29 lakh on Khandelwal for several violations of the IBC, the Disciplinary Committee of the IBBI had also directed Khandelwal to also ensure reimbursement of the legal fee paid to the lawyers of Bhushan Power and Steel from its Committee of Creditors.
The direction to ensure reimbursement of legal fee was passed by the IBBI after noting that Khandelwal included the fee of Rs 12,09,90,185 payable to CoC’s legal counsel, Cyril Amarchand Mangaldas (CAM) in the Insolvency Resolution Process Cost (IRPC). It was also noted that part of this payment even pertained to the services rendered by CAM for a period prior to the insolvency commencement.
The Court today recorded that Khandelwal had made the deposit of Rs 29 lakh with the Court’s registry without prejudice to his right.
In view of the deposit of the penalty amount and the direction to the CoC to deposit the legal fee, the Court today stayed that IBBI order insofar as it barred Khandelwal from accepting any new assignment or continuing with the existing ones.
The counsel for CoC today also informed the Court they were in the process of filing a challenge to the IBBI order as well as the relevant Circular.
In his petition filed through Ortis Law Offices, Khandelwal has submitted before the High Court that the IBBI order is wholly arbitrary, iniquitous, unsustainable and was passed without the application of a judicious mind.
Assailing the finding with respect to a “conspiracy” between the CoC and him, Khandelwal has argued that the mere fact that the professional fee payable to lawyers was wrongly included in the IRPC, does not ipso facto lead to the conclusion that there was any conspiracy between the CoC and Khandelwal to cause wrongful loss to Bhushan Power and Steel.
Khandelwal was represented before the Delhi High Court by Senior Advocate Sandeep Sethi.
IBBI was represented by ASG Madhavi Divan.
CoC was represented by Senior Advocate Ramji Srinivasan and Cyril Amarchand Mangaldas Associate Surbhi Khattar.