Salary for the period prior to the commencement of CIRP, in case any Resolution Plan is approved, the Resolution Applicant shall bear the expenses – Committee of Creditors of EMCO Limited Vs. Mrs. Mary Mody – NCLAT New Delhi
Section 25(2)(c) deals with ‘Duties of Resolution Professional’ with respect to raising Interim Finance subject to the approval of Committee of Creditors under Section 28. Section 28 refers to whether the approval of Committee of Creditors is required for raising ‘Interim Finance’. It is reiterated by the Resolution Professional that the Corporate Debtor is not a going concern. The Application MA 4002/2019 in CP (IB) No. 2849/MB/2018 was preferred by the employees seeking direction to also pay the salaries for the period prior to the commencement of CIRP cost. It is a well settled proposition of law that for the cost incurred prior to the CIRP process, in case any Resolution Plan is approved, the ‘Resolution Applicant’ shall bear the expenses. In the instant case, it is not in dispute that the Resolution Plan has not been approved and the CoC has recommended for liquidation.