NCLT: Insolvency Resolution Process can be initiated for non-payment of fee

National Company Law Tribunal, New Delhi: In the order passed by INA Malohtra (Judicial Member), S.K. Mohapatra (Technical Member), for the petition filed under Section 9 of Insolvency and Bankruptcy Code, 2016 in regards to seek the payment of his fee for services rendered by him towards the respondent stands allowed. The plaintiff mentioned that despite his repeated demands for payment, for the services rendered in the course of May 2016 and July 2016, the respondent failed to liquidate his liability. Satisfied by the claims of petitioner, the Tribunal held that the petitioner is entitled to initiate the ‘Insolvency Resolution Process’ against the respondent for payment of his dues.

The Tribunal issued a moratorium, to come into effect as per Section 14 of the Code, with the following directions-

1. Prohibition of institution of suits against respondent in any court of law, tribunal, arbitration panel or authority

2. Prohibition of transferring any of the assets of the respondent

3. Prohibition of recovery through security interest created by the respondent

4. Recovery of property owned or in possession of the respondent

Also, the Tribunal further directed that the services being rendered to the respondent shall not be terminated during the moratorium period, and that the Interim Resolution Professional should take necessary steps as per Sections 15, 17 and 18 of the Code. Furthermore, on account of the petitioner, the Tribunal observed that, documents submitted including the certification that proves that there is no disciplinary proceeding against him, is admissible, hence concluding to allow the petition, since it fulfilled all the required criterion for invoking the Resolution Process. [Toll Global Forwarding Private Ltd. v. Sarash Exports Services Private Ltd., 2017 SCC OnLine NCLT 2000, decided on 22-11-2017]

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