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CS Professional · Corporate Restructuring, Valuation and Insolvency · Convening and Conduct of Meetings of Committee of Creditors

Bank X, a member of the CoC of Ganga Infra Ltd, wishes to be represented at a CoC meeting by an insolvency professional (IP) other than the RP. Which statement matches section 24?

A CoC member may appoint an insolvency professional other than the RP to represent it at a meeting, and the fees of that professional are borne by the appointing creditor. Section 24(5) and its proviso provide this, subject to the relevant parts of section 21.

  1. AIt is not permitted; only the RP may represent creditors
  2. BIt is permitted, and the fees of that IP are borne by the corporate debtor as CIRP costs
  3. CIt is permitted, and the fees of that IP are borne by the creditor who appoints himCorrect
  4. DIt is permitted only with prior Adjudicating Authority approval

Explanation

Section 24(5) lets a CoC member appoint an IP other than the RP to represent it, subject to section 21(6), (6A) and (6B). The proviso says the fees payable to that IP are borne by the appointing creditor. Treating the fees as CIRP costs is the key error in the second option.

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