Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Preparation and Approval of Resolution Plan

In the CIRP of Arjun Steels Ltd, the resolution professional (RP) received a monthly fee of Rs 4 lakh during the CIRP. The committee proposes that he join the monitoring committee at Rs 6 lakh per month. What is the position under the Regulations as given?

The proposal is not permitted at Rs 6 lakh. The resolution professional may sit on the monitoring committee, but his monthly fee cannot exceed the monthly fee he received during the CIRP, here Rs 4 lakh. Consent of the applicant does not override the cap.

  1. ANot permitted; his monthly fee as a monitoring committee member cannot exceed Rs 4 lakhCorrect
  2. BPermitted, since the committee may fix any fee by majority
  3. CPermitted if the resolution applicant agrees to pay the excess
  4. DNot permitted; the RP can never be a member of the monitoring committee

Explanation

Regulation 38(4)(b) allows the RP to be a member, but the proviso caps his monthly fee at the monthly fee he received during the CIRP, which is Rs 4 lakh. Rs 6 lakh exceeds the cap, and the applicant's consent does not change this.

Did you get it right without looking?

One question tells you little. A timed set on Preparation and Approval of Resolution Plan shows your real accuracy, how long you take and where you lose marks.

Practise Preparation and Approval of Resolution PlanFree diagnostic mock

More Preparation and Approval of Resolution Plan questions