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2022 (8) TMI 931 - AT - Insolvency and BankruptcyContravention of the scheme for compromise and arrangement - whether the fees payable to the Appellant/Liquidator will become payable only upon occurrence of the events of respective receipts and disbursals at specified rates payable and not otherwise? - Principles of law of estoppel - Section 53 of the IBC read with Regulation 4(3), 42 and 44 of the I B Code (Liquidation Process) Regulations, 2016 - HELD THAT - This Tribunals takes serious note on the part of the Appellant that the Appellant failed to disobey the orders of the Adjudicating Authority dated 20.07.2020 in toto and also it is evident from the observations of the order itself. Further, the Respondents also clearly mentioned that the Appellant purposely delayed in handing over the reins of the Corporate Debtor to the Respondents for the reasons best known to him. It was only a partial handing over was done by the Appellant to the Respondents. Keeping in view of the of the paramount interest of the Corporate Debtor, this Tribunal directs the Appellant to handover the books of accounts to the Respondents, within a period of one week from the date of receipt of copy of this judgment, if not already handed over. This Tribunal comes to a resultant conclusion that the Appellant has not made out any case either on law or on facts. Further, this Tribunal holds that the Appeal is frivolous and vexatious and the same is dismissed.
Issues Involved:
1. Payment of Liquidator's Fees 2. Compliance with Section 29A of the IBC 3. Implementation of the Scheme of Compromise and Arrangement 4. Handover of Corporate Debtor's Assets and Records Issue-wise Detailed Analysis: 1. Payment of Liquidator's Fees: The appellant contested that the fees payable to the Liquidator should be immediate and not contingent upon the occurrence of receipts and disbursals. The appellant argued that under Regulation 42 of the IBC (Liquidation Process) Regulations, 2016, the liquidator's fees become due within 30 days after the scheme for compromise and arrangement is approved. The appellant also cited Section 53 of the IBC to assert that the fees should be paid on priority. However, the Adjudicating Authority held that the liquidator's fees are payable only upon the occurrence of disbursals and receipts, and not otherwise, as per the unamended Regulation 4 of the IBBI (Liquidation Process) Regulations, 2016. The Tribunal affirmed that the liquidator's fee should be calculated based on actual receipts and disbursals, and not immediately as demanded by the appellant. 2. Compliance with Section 29A of the IBC: The respondents argued that the scheme proponents were not disqualified under Section 29A of the IBC. The Adjudicating Authority had directed the appellant to file a report certifying the eligibility of the respondents, which was complied with. The Tribunal noted that the issue of ineligibility under Section 29A was not contested by the appellant before the Adjudicating Authority and was raised as an afterthought. The Tribunal found that the respondents were eligible under Section 29A, and the appellant's contention regarding ineligibility was dismissed. 3. Implementation of the Scheme of Compromise and Arrangement: The scheme of compromise and arrangement was approved by the Adjudicating Authority on 10.01.2020, and the liquidator was directed to oversee its implementation. The respondents claimed that the appellant delayed the handover of the Corporate Debtor, causing financial losses. The Tribunal noted that the appellant had been appointed as an independent observer to oversee the scheme's implementation and should not have withheld the handover of the Corporate Debtor's management and assets. The Tribunal emphasized that the appellant's role was to manage the affairs of the Corporate Debtor during the implementation of the scheme, and not to act as a liquidator. 4. Handover of Corporate Debtor's Assets and Records: The respondents alleged that the appellant failed to hand over essential records and assets of the Corporate Debtor, including books of accounts, tax records, and legal files. The Tribunal directed the appellant to hand over all necessary records to the respondents within one week from the date of receipt of the judgment. The Tribunal took serious note of the appellant's non-compliance with the Adjudicating Authority's orders and emphasized the importance of handing over the assets and records for the resuscitation of the Corporate Debtor. Conclusion: The Tribunal found no infirmity or illegality in the Adjudicating Authority's order dated 20.07.2020. The appeal was dismissed as frivolous and vexatious, with no orders as to costs. The appellant was directed to hand over the books of accounts and other records to the respondents within one week. The Tribunal upheld the Adjudicating Authority's decision regarding the payment of liquidator's fees, compliance with Section 29A, and the implementation of the scheme.
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