# In the matter of Master Weavers Ethinics India Private Limited

> NCLT judgment dated 2023-05-22. Citation: TCN-2023-NCLT-03234. The case pertains to an application filed by the Resolution Professional (RP) under Section…

- **Court:** NCLT
- **Order date:** 22 May 2023
- **Citation:** TCN-2023-NCLT-03234
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/master-weavers-ethinics-india-private-limited-0f00da76

## Summary

### Background

The case pertains to an application filed by the Resolution Professional (RP) under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking a direction from the NCLT to the Committee of Creditors (CoC) to pay the Corporate Insolvency Resolution Process (CIRP) expenses and the RP's fees, amounting to Rs. 7,58,104, proportionately according to their voting share. The CIRP was initiated following the admission of a petition under Section 7 of the IBC filed by India Resurgence ARC Private Limited. The RP was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. The CoC was reconstituted, and meetings were held to approve the RP's fees and out-of-pocket expenses. However, the CoC did not pay the CIRP expenses

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## Facts

The Resolution Professional (RP) of Master Weaver Ethnics Private Limited filed an application seeking payment of Corporate Insolvency Resolution Process (CIRP) expenses and RP fees amounting to Rs. 7,58,104 from the Committee of Creditors (CoC). The CIRP was initiated based on a petition filed by India Resurgence ARC Private Limited under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The RP was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. Public announcement was made as per Section 15 of IBC. Several CoC meetings were conducted to approve the RP's fees and out-of-pocket expenses. The CoC initially approved the RP's fees and expenses, but later requested a reduction in the fee. The CoC also

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## Issues and analysis

### Issue 1: Whether the Committee of Creditors (CoC) is liable to pay the Corporate Insolvency Resolution …

**Ratio:** The CoC is responsible for bearing the CIRP costs, including the RP's fees, as per the

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**Reasoning:** The court considered the fact that the CoC members did not deny their responsibility to

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**Interpretation:** The IBC mandates that the CIRP costs are to be borne by the CoC, ensuring that

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**Application:** The court applied the principle that the CoC is responsible for CIRP costs to

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Malireddy Ramana…
- **Respondents:** MASTER WEAVER…; M/s. India…

## Timeline

- **2022-04-04 — Petition Ad…**: Tribunal admitted the petition under section 7 of IBC, 2016 filed by India Resurgence ARC…
- **2022-04-10 — Public Annou…**: Applicant/RP issued Public Announcement in Form-A as per section 15 of IBC read with…

## 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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