# In the matter of Iris Electro Optics Pvt. Ltd.

> NCLT judgment dated 2023-08-01. Citation: TCN-2023-NCLT-02246. The case involves an application filed by the Financial Creditor under Section 60(5) of the…

- **Court:** NCLT
- **Order date:** 1 Aug 2023
- **Citation:** TCN-2023-NCLT-02246
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/iris-electro-optics-pvt-ltd-16b8826f

## Summary

### Background

The case involves an application filed by the Financial Creditor under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking direction for the respondents to make payments of Resolution Professional fees and expenses of Corporate Insolvency Resolution Process (CIRP) amounting to Rs. 38,21,022/-. The CIRP was initiated against Iris Electro Optics Pvt. Ltd. based on an order dated 28.03.2019. The applicant was appointed as Interim Resolution Professional (IRP). The respondents, Bank of India and Laxmi Kantha Rao Thota, were part of the Committee of Creditors (CoC). The CIRP process completed 32 months, and the original company petition was set aside on 14.02.2022. The applicant claims that the respondents have not paid the CIRP expenses despite approving

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## Facts

Mr. Chakravarthi Srinivasan was the Erstwhile Resolution Professional of M/s Iris Electro Optics Pvt. Ltd. Bank of India was a member of the CoC. Laxmi Kantha Rao Thota was also a financial creditor. An application was filed by the Financial Creditor seeking payment of Resolution Professional fees and expenses amounting to Rs. 38,21,022/-. The CIRP was initiated against Iris Electro Optics Pvt. Ltd. on 28.03.2019. The applicant was appointed as Interim Resolution Professional (IRP). The respondents, Bank of India and Laxmi Kantha Rao Thota, were part of the Committee of Creditors (CoC). The CIRP process completed 32 months, and the original company petition was set aside on 14.02.2022. The applicant claims that the respondents have not paid the CIRP expenses despite

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## Issues and analysis

### Issue 1: Whether the first respondent (Bank of India) is liable for payment of the fee and expenses of the …

**Ratio:** The constitution of the CoC by the petitioner was found to be illegal and fraudulent,

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**Reasoning:** The tribunal found that the Resolution Professional acted in a biased manner, reducing

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**Interpretation:** The interpretation hinges on the validity of the CoC's constitution and the

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**Application:** Since the tribunal found the CoC's constitution illegal and fraudulent, the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Chakravarthi…
- **Respondents:** IRIS Electro…; Bank of…

## Timeline

- **2019-03-28 — CIRP Init…**: Order dated 28.03.2019 ordered the commencement of Corporate Insolvency Resolution…
- **2019-11-27 — IA 544/2019…**: Tribunal directed the first respondent herein being the sole secured creditor to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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