9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 306 - Tri - Companies LawDeciding or approving the Liquidator's fees and for his payment within a period of thirty days from the date of approval of the Scheme - CIRP process - HELD THAT - The Scheme as contemplated by the proponents of the Scheme in the instant case, cannot be considered as a transaction of 'sale' falling within the ambit of Regulation 32 of Liquidation Process Regulations, 2016 as rightly pointed out by the Ld. Counsel for the Scheme proponents. However, even though the amended Regulation 4 of the Liquidation Process Regulations 2016 draws a distinction in this connection in the event of a scheme proposed and as well as in its absence as repeatedly brought forth in the earlier portion, no such distinction or for that matter no specific mention has been made in relation to a scheme and in relation to the fees payable to the Liquidator under the concerned Regulations pre-amendment. This Tribunal is required to only apply in relation to ascertaining the amount of fees payable to the Liquidator, the unamended Regulations i.e. the Regulation of Liquidation Process Regulations as it stood prior to 25.07.2019 and cannot apply the amended Regulations even as a guide in this regard as submitted by the Ld. Counsel for the Scheme proponents. The question of applicability of Regulation 39D of the IRCP Regulations, 2016 as amended from 25.07.2019 cannot also be applied under the circumstances. Thus being conscious that this Tribunal being a creature of the statute and is required to apply the provisions of IBC, 2016 and the Rules and Regulations framed thereunder as it is reflected fastidiously reference to Regulation 4 of the Liquidation Process Regulations, 2016 and closer scrutiny of the same discloses that the Liquidation fees of the Liquidator is required to be computed based on realisation, net of other Liquidation costs and of the amount distributed, and no where the said Regulations uses the term Realization of Sale assets . In the circumstances, the submissions made by the Ld. Counsel for the Scheme proponents that since the transaction cannot be brought under Regulations 32 contemplating various modes of 'Sale' therein cannot hold much water. Applying Regulation 4 of Liquidation Process Regulations, 2016 as it stood prior to amendment made w.e.f. 25.07.2019, we find that the calculation as given by the Liquidator in the typed set filed along with the application which tabulation has also been extracted in para 22 supra is sustainable and in the absence of committee of creditors fixing the fees of the Liquidator or the Liquidation costs, is required to be hence allowed. The Liquidation process of the Corporate Debtor/Company in Liquidation stands revoked for the time being to enable the Corporate Debtor/Company in Liquidation to revive and reconstruct by implementing the Scheme sanctioned in terms of the order dated 10.01.2020 and carry forward its business activity/undertaking in terms of the Scheme by the Scheme proponents - application disposed off.
Issues Involved:
1. Approval and payment of Liquidator's fees. 2. Priority of CIRP cost and Liquidation expenses. 3. Applicability of pre-amendment and post-amendment regulations. 4. Dispute resolution regarding Liquidation costs. 5. Implementation and monitoring of the Scheme. Issue-wise Detailed Analysis: 1. Approval and payment of Liquidator's fees: The Liquidator sought approval for his fees and payment within thirty days from the approval of the Scheme. The Tribunal noted that the fees payable to the Liquidator should be calculated based on the unamended regulations, as the liquidation order was passed before the amendment date of 25.07.2019. According to Regulation 4(3) of the IBBI (Liquidation Process) Regulations, 2016, the Liquidator's fees are to be computed based on realization and distribution percentages. The Tribunal found the Liquidator's calculation of ?91,69,768/- (?70,69,670/- for realization and ?21,00,098/- for distribution) sustainable and approved it. 2. Priority of CIRP cost and Liquidation expenses: The Liquidator contended that CIRP cost and liquidation expenses, including his fees, should have priority over other payments under the Scheme. The Tribunal directed that the CIRP cost of ?135 lakh, ratified by the CoC, should be paid within seven days from the date of the order. The Liquidator's fees and other liquidation costs were to be paid based on actual expenses incurred and sufficient proof provided by the Liquidator. 3. Applicability of pre-amendment and post-amendment regulations: The Tribunal emphasized that the unamended regulations should apply, as the liquidation order was passed before the amendment date. The Tribunal rejected the Scheme proponents' argument to apply the amended regulations as a guide. The Tribunal also noted the principle of 'casus omissus' to fill gaps in the regulations, applying the pre-amendment regulations fastidiously. 4. Dispute resolution regarding Liquidation costs: The Tribunal directed that any disputes regarding liquidation costs, other than the Liquidator's fees, should go to mediation before the independent Statutory Auditor of the Corporate Debtor. The auditor was to scrutinize the accounts and vouchers and ascertain the liquidation costs payable within thirty days from the date of the order. 5. Implementation and monitoring of the Scheme: The Tribunal directed the Liquidator to act as an independent observer in the Board of the Corporate Debtor/Implementing Agency of the Scheme until all payments were realized and distributed. Any infraction by the Scheme proponents in implementing the Scheme or paying the Liquidator's fees would result in the Corporate Debtor lapsing back into liquidation mode, with the Liquidator resuming his role. Conclusion: The application was disposed of with the Tribunal approving the Liquidator's fees, directing the payment of CIRP costs, applying pre-amendment regulations, setting up a dispute resolution mechanism for liquidation costs, and outlining the implementation and monitoring process for the Scheme. The liquidation process was temporarily revoked to enable the Corporate Debtor to revive and reconstruct under the sanctioned Scheme.
|
