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2022 (11) TMI 760 - AT - Companies LawWinding up of company - Payment of remuneration to the liquidator - Computation of remuneration as per IBC - Section 271(a) and 272(1)(a) of the Companies Act, 2013 - In the instant case does not involve the applicability of the provisions of IBC, 2016 or any of the Rules and Regulations under the Code, 201 - HELD THAT - The Ld. Counsel for the Appellant filed Notification issued by the Ministry of Corporate Affairs dated 24.01.2020 in exercise of the powers conferred by sub-sections (1) and (2) of section 468 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013) and these Rules are known as Companies (winding up) Rules, 2020 wherein Rule 14 provides the appointment of Provisional Liquidator or Company Liquidator and also Part IV deals with cost, etc. in which Rule 188 giving Tribunal's power to fix a fee. The Tribunal mainly considered the provisions of IBBI (Liquidation Process) Regulations, 2016 as amended in 2019 which have quoted in para 5 and 6 of the impugned order and passed the order regarding the fees but the Tribunal has not considered the provisions of Ministry of Corporate Affairs dated 24.01.2020 regarding Companies (winding up) Rules, 2020. As the application was filed winding up provisions of Sections 271(a) and 271(1)(a) of the Companies Act, 2013 seeking winding up of the Company. The matter is remitted back to the National Company Law Tribunal, Cuttack Bench, Cuttack with a request to hear the parties herein and pass reasoned orders after considering the provisions of Companies (winding up) Rules, 2020 issued by the Ministry of Corporate Affairs vide Notification dated 24.01.2020 within eight weeks from the date of receipt of this judgment - Appeal disposed off.
Issues Involved:
1. Applicability of IBBI (Liquidation Process) Regulations, 2016 in determining the Liquidator's fees. 2. Appropriateness of the Tribunal's reliance on IBBI regulations for fixing Liquidator's remuneration. 3. Consideration of Companies (Winding Up) Rules, 2020 in determining Liquidator's fees. Detailed Analysis: 1. Applicability of IBBI (Liquidation Process) Regulations, 2016 in determining the Liquidator's fees: The Appellant contended that the Tribunal erroneously applied the IBBI (Liquidation Process) Regulations, 2016 to determine the Liquidator's fees. The Liquidator was appointed under the Companies Act, 2013, and not under the Insolvency and Bankruptcy Code (IBC), 2016. Therefore, the provisions of the IBBI regulations were not applicable. The Appellant argued that the Tribunal should have considered the Companies (Winding Up) Rules, 2020, which govern the liquidation process under the Companies Act, 2013. 2. Appropriateness of the Tribunal's reliance on IBBI regulations for fixing Liquidator's remuneration: The Tribunal fixed the Liquidator's fees based on Regulation 4(2) of the IBBI (Liquidation Process) Regulations, 2016, as amended in 2019. The Appellant argued that this reliance was misplaced because the Liquidator was appointed under the Companies Act, 2013, and not under the IBC. The Appellant emphasized that the entire lump sum remuneration had already been paid to the Liquidator as per the Tribunal's earlier order dated 07.08.2020. The Appellant claimed that the Liquidator's application for further remuneration was an attempt at unjust enrichment and would impose an undue financial burden on the public exchequer. 3. Consideration of Companies (Winding Up) Rules, 2020 in determining Liquidator's fees: The Tribunal failed to consider the Companies (Winding Up) Rules, 2020, issued by the Ministry of Corporate Affairs on 24.01.2020, which govern the appointment and remuneration of Liquidators under the Companies Act, 2013. The Appellant argued that the Tribunal should have referred to these rules instead of the IBBI regulations. The Tribunal's oversight in this regard led to the appeal being filed. Tribunal's Observations and Decision: The Tribunal acknowledged the arguments presented by both parties. The Tribunal noted that the Companies (Winding Up) Rules, 2020, were not considered while passing the impugned order. The Tribunal observed that the rules issued by the Ministry of Corporate Affairs specifically address the appointment and remuneration of Liquidators under the Companies Act, 2013. The Tribunal set aside the impugned order dated 08.10.2021 and remitted the matter back to the National Company Law Tribunal, Cuttack Bench, Cuttack. The Tribunal directed the Cuttack Bench to hear the parties and pass reasoned orders after considering the provisions of the Companies (Winding Up) Rules, 2020. The Tribunal requested the Cuttack Bench to complete this process within eight weeks from the date of receipt of the judgment. Conclusion: The appeal was disposed of with the direction to the National Company Law Tribunal, Cuttack Bench, to reconsider the Liquidator's fees in light of the Companies (Winding Up) Rules, 2020. The Tribunal emphasized the importance of applying the appropriate legal provisions governing the liquidation process under the Companies Act, 2013.
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