# In the matter of Yashasvi Yarns Ltd.

> NCLT judgment dated 2023-04-25. Citation: TCN-2023-NCLT-03641. The application IA/222(AHM)2023 was filed for the grant of incentive to the Resolution…

- **Court:** NCLT
- **Order date:** 25 Apr 2023
- **Citation:** TCN-2023-NCLT-03641
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/yashasvi-yarns-ltd-299197cc

## Summary

### Background

The application IA/222(AHM)2023 was filed for the grant of incentive to the Resolution Professional (RP). The RP completed the Corporate Insolvency Resolution Process (CIRP) within eight months (240 days), and based on Regulation 34 (B) (4) of IBBI (IRCP Regulations), 2016, the RP claimed entitlement to an incentive. The Committee of Creditors (CoC) had already exercised its discretion in its meeting dated 01.12.2022 and rejected the incentive.

## Facts

State Bank of India initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC) against Yashasvi Yarns Ltd. The Resolution Professional (RP) completed the Corporate Insolvency Resolution Process (CIRP) within eight months (240 days). The RP filed an application (IA/222(AHM)2023) seeking an incentive for the early completion of the CIRP, citing Regulation 34 (B) (4) of the IBBI (IRCP Regulations), 2016. The Committee of Creditors (CoC) had already met on 01.12.2022 and exercised its discretion to deny the incentive to the RP. The CoC's decision was based on the fact that the regulation is not mandatory and the CoC has the discretion to allow performance-based incentive fees. The voting pattern in the CoC meeting showed that 91.55% voted against the

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) is entitled to an incentive for completing the Corporate …

**Ratio:** Regulation 34 (B) (4) of the IBBI (IRCP Regulations), 2016, provides for incentives but

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**Reasoning:** The court reasoned that the regulation is not mandatory and the CoC has the discretion to

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**Interpretation:** The interpretation of Regulation 34 (B) (4) is that it grants the CoC the

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**Application:** The court applied the ratio to the facts of the case, noting that the CoC had

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## Parties

- **Judges:** Mr.Ashok Kumar…; Mr.Kaushalendra…
- **Appellants:** State Bank of…
- **Respondents:** Yashasvi Ya…

## Timeline

- **2022-12-01 — CoC Meet…**: The Committee of Creditors (CoC) exercised its discretion in its meeting and rejected the…
- **2023-04-25 — Order Del…**: The order was delivered dismissing…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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