9911796707
TMI Blog2025 (2) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... was preferred by the Liquidator of the Corporate Debtor under Section 60(5) of the IBC seeking direction against the Appellant to pay the Liquidator's fee for an amount of Rs 25,47,229/- (rupees twenty- five lakhs, forty-seven thousand, two hundred and twenty-nine only). Brief facts of the case 2. NCLT, Mumbai, initiated Corporate Insolvency Resolution Process (CIRP) proceeding against the Corporate Debtor (Narendra Solvex Private Limited) on 16.09.2021. Since CIRP did not result in fruitful result, the NCLT passed orders for liquidation of the Corporate Debtor vide Orders dated 27.01.2024 along with Rectification Order dated 28.03.2023. 3. The Respondent / Liquidator made public announcement in compliance with Regulation 12 of the Liquidation Process Regulation on 06.04.2023. The last date for submission of claims was 06.05.2023. The Appellant, Shikshak Sahakari Bank Ltd., filed its claim in 'Form D' for an amount of Rs 5,95,45,557/- (rupees five crores, ninety-five lakhs, forty-five thousand, five hundred and fifty-seven only) as on the liquidation commencement date. 4. Further, the Appellant also mentioned in its claim form that it is not relinquishing security interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.A. with the order, relevant paras are quoted herein: "..... 9. Without going into the merits of the case, this Bench notes that this Application has made out due to non-compliance of order dated 15.09.2023, wherein this Bench specifically directed the Respondent to pay the dues of the liquidator. It is the case of the Respondent that the Liquidator is entitled for fees under Regulation 4 sub-regulation 2(b), only when he has actually realized or distributed any amount, However, on bare perusal of Regulation 4 of the IBBI (Liquidator Process) Regulations, 2016, this Bench is of the view that as per Regulation 4, the fee payable to the liquidator has to be decided by the Committee of Creditors under Sub-Regulation (1) or the Stakeholders' Consultation Committee under Sub-Regulation (1A), as the case may be. If the fee is not so fixed, the formula prescribed under Regulation 4(2)(b) would come into play. 11. In view of above facts and circumstances of the case, the Respondent is hereby directed to pay the Liquidator fees as per Regulation 4(1A) of the IBBI (Liquidation Process) Regulations, 2016 within three-weeks from the date of receipt of order. 12. Accordingly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication No. I.A 785 (MB)/ 2024. And, therefore, the Impugned Order dated 30.08.2024 is liable to be set aside. 14. The Respondent / Liquidator for the Corporate Debtor in its Reply had noted that it accepted the claim of the Respondent in full as per its claim in Schedule-I and intimated the same to the Respondent on 03.06.2023. 15. Respondent / Liquidator contends that the Appellant did not comply with Regulation 21-A of the Liquidation Process Regulations, 2016, within the 90 days of the liquidation commencement date. The Appellant was required to pay the following costs in order to comply with Regulation 21- A(2) of the Liquidation Process Regulations . Particulars Amounts CIRP Cost 60,231 Liquidation cost (excluding the fee of Liquidator) 59,130 fee of Liquidator 14,48,965 Total 15,68,326 16. It is admitted position that the Appellant had consented it will realise the secured asset in the manner provided under Section 52(1)(b) of the Code, and decided the reserve price to be Rs 2,24,15,000/- (rupees two crores, twenty-four lakhs and fifteen thousand only). The Respondent / Liquidator, on 15.05.2023, requested the Appellant to remit the pending CIRP / liquidation c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, they have not been included in the Stakeholders Consultation Committee as per the provisions of Regulation 31A." 19. The matter relating to the sharing of the cost as per the mandate of Regulation 21-A of the Liquidation Process Regulations, 2016, was once again discussed through emails. The Appellant once again took up the matter with the Liquidator on 27.06.2023 about their intent to sell the secured asset and assured that their share of cost shall be paid as per the mandate of Regulation 21A. On 19.07.2023, the Liquidator informed the Appellant that the 90-day period as per Regulation 21A has expired. 20. On 31.07.2023, the Appellant wrote to the Liquidator again, disputing the fee of the Liquidator. 21. The Respondent relies upon this Tribunal's judgment in 'State Bank of India Vs. Navjit Singh in Company Appeal (AT) (Insolvency) No. 151 of 2022' and also another judgement of this Tribunal in 'Comp. App. (AT)(Ins) No. 1027 of 2021 in Small Industries Development Bank of India (SIDBI) v. Shri Vijender Sharma.' 22. The Respondent / Liquidator vehemently opposes the Appeal and contends that the fee payable is as per the Regulations and Orders of the Adjudicating Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquidation cost including the fee of the Liquidator which is a condition precedent as mandated under Regulation 21-A(2) of the Liquidation Process Regulations, 2016. The Appellant has been seeking clarifications with respect to the calculation of the liquidation cost, which has been duly replied to time and again by the Respondent / Liquidator, along with the provision of Regulation 21-A(2) and also Regulation 2(ea) of the Liquidation Process Regulations, 2016. 27. The Adjudicating Authority has directed the Appellant to release the money and pay the liquidation fee as per Regulations 4(3) and 4(4) of the Liquidation Rules, 2016. 28. Regulation 21-A of the Liquidation Process Regulations, 2016, mandates Secured Creditors to inform the Liquidator of their decision to realise their security interest and to pay their share of the liquidation costs1 within 90 days. It was agreed by the Appellant that the liquidation cost will of 2013), if any, shall not form part of liquidation cost. be shared as per Regulation 21-A but was raising clarifications regarding its calculations and which was clarified also by the liquidator again and again and this exchange was going on for quite some ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t will be clear from this provision that the Secured Creditor is mandatorily obligated to pay its share as per Section 53(1)(a) and 53(1)(b)(i) of the Code which provides for distribution of assets from the sale of liquidation assets in the order of priority. (waterfall mechanism). Further, Regulation 21A (3) of Liquidation Process Regulations, 2016, provides that where a Secured Creditor fails to comply with Sub-Regulation (2), the asset, which is subject to security interest, shall become part of the liquidation estate. 31. The Appellant failed to comply with this mandate. The protracted email exchange between the parties confirms that despite repeated reminders, the Appellant neither paid full liquidation costs nor demonstrated compliance with Regulation 21A(2). The 90-day period from the liquidation commencement date also lapsed without payment of the requisite costs. 32. The Adjudicating Authority vide its Order dated 15.09.2023 had specifically directed the Appellant to pay the dues of the Liquidator, which is justified as per Regulation 21-A. 33. The Appellant has tried to place reliance upon the clarification issued by IBBI as noted at page 109 of appeal paper book in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant any interference. What was directed was as per Liquidation Regulation 21A as extracted in Paragraph 10 of the Judgment from which it is clear, even if the secured creditor proceeds to realise its security interest it is liable to pay fee as contemplated under Regulation 21A (2)(a). The Adjudicating Authority has only directed the Applicant to follow the regulations as noted in paragraph 13." 35. The Respondent/Liquidator also relies upon this Tribunal's judgment in Small Industries Development Bank of India (SIDBI) v. Shri Vijender Sharma (supra) wherein it was held that: "21. It thus becomes quite clear that compliance of regulations 2(ea), 2-А, 21-A and 37 of the Liquidation Process Regulations and Section 52/53 of the IBC are absolutely necessary even if the secured creditor proceeds to realise its security interest. 22. We thus, find that the liquidator has carried out his responsibility with due diligence and without any prejudice to Appellant or any other stakeholder, and therefore, cannot be held responsible for delay that has taken place in pursuing the liquidation of the corporate debtor. Therefore, we come to the conclusion that the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
