The Weekly Obiter


January 22, 2018

The Insolvency Bank Board of India (IBBI) has issued a circular (No. IP/004/2018) dated 16th January, 2018 clarifying the norms of payment of fees to insolvency professionals as well as other professionals who are appointed by such insolvency professionals.
The Code of Conduct for Insolvency Professionals under the IBBI (Insolvency Professionals) Regulations, 2016 require an insolvency professional to provide service for remuneration which is charged in a transparent manner, and is a reasonable reflection of the work necessarily and properly undertaken. It prohibits the professional from accepting any fees other than those which are disclosed to and approved by the persons fixing his remuneration.
The Circular now clarifies, “…an insolvency professional shall render services for a fee which is a reasonable reflection of his work, raise bills / invoices in his name towards such fees shall be paid to his bank account. Any payment of fees for the services of an insolvency professional to any person other than the insolvency professional shall not form part of the insolvency resolution process cost. ”
Similarly, it requires any other professional appointed by an insolvency professional to raise bills / invoices in his name. Such fees, it says, shall be paid to his bank account.