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Judgment
O R D E R
Per: Coram
The application has been filed by the Liquidator of M/s. Asten Realtors Private Limited under Regulation 31(A)(11) of the IBBI (Liquidation Process), 2016, seeking the following reliefs: -
To replace the present Liquidator, Sri. K.C. Padmakumar and appoint Sri. Sreenivasan P R as the Liquidator of the Corporate Debtor as resolved by the SCC.
To fix a fee of Rs. 2 Lakh per month as the fee of the liquidator to be replaced for the period he has worked, which is equivalent to the minimum fee prescribed by the IBBI for the Corporate Insolvency Resolution Process.
To fix the fee of Rs. 10,000/- per month to the Chartered Accountant and Rs.15,000/-per month for secretarial assistance for the period they have worked.
Direct the Respondents to make the payments fixed by this Tribunal forthwith and also to direct the Respondents to pay the Liquidation cost incurred till date in the interest of justice.
The brief facts of the case are as follows:
This Adjudicating Authority vide Order dated 25.01.2023 in CP(IBC)/54/KOB/2020, admitted the application filed by Sri. Chandy John Samuel & Others against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiating the Corporate Insolvency Resolution Process. This Adjudicating Authority approved two project-wise resolution plans during the CIRP period and for the residual assets including one Project Asten Aurum Woods, this Adjudicating Authority passed an order for liquidation vide order dated 19.11.2024 and appointed the Applicant herein as the Liquidator from the panel of Insolvency Professionals.
The Applicant made a public announcement inviting claims on 23.11.2024. The last date of receipt of claims was 19.12.2024. This applicant collated the claims, prepared a list of stakeholders based on the claims received, and constituted the Stakeholders’ Consultation Committee on 18.01.2025.
The Respondent Nos. 1 and 2 together hold a 92.99% Voting share in the SCC and are Financial Creditors being financial institutions required to contribute towards liquidation cost in terms of Regulation 2A (1) of the IBBI (Liquidation Process) Regulations, 2016.
The Applicant stated that since two resolution plans have already been approved by this Adjudicating Authority, the Liquidator has appointed two valuers each for all the three asset classes as approved by the 2nd SCC dated 27.01.2025 to conduct the valuations of the remaining assets of the Corporate Debtor excluding the assets in which resolution plans have been approved.
It is further stated that since the Committee of Creditors has not fixed the remuneration of the Applicant, the Applicant proposed a monthly remuneration of Rs.2.50 Lakhs per month. However, the same was not approved by the Respondents. Hence, the Applicant has revised the fee to Rs. 2 Lakhs per month. However, this fee also was not acceptable to the members of the SCC who rejected the same with a 93.37% vote. The 1st Respondent has proposed the replacement of the Applicant with a new Liquidator and proposed the name of Mr. Sreenivasan P.R, holding IP Registration No. IBBI/IPA-001/IP-P02174/2021-2022/13722. It is stated that the Applicant has placed the said resolution proposed by the 1st Respondent in the 3rd SCC held on 27.02.2025. The SCC with a vote of 94.30% resolved to replace the Liquidator with Mr. Sreenivasan P. R.
The Applicant stated that the Corporate Debtor has a total admitted claim of Rs. 204,10,76,644/- (Rupees Two Hundred Four Crores Ten Lakhs Seventy-Six Thousand Six Hundred Forty-Four Only) in the Liquidation Process. Under Regulation 34B of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, Schedule II, if the quantum of claims admitted is more than Rs.50 Crores but less than Rs.500 Crores, the minimum Fee prescribed by the IBBI per month is Rs.2 Lakhs. In Liquidation, no such monthly fee has been prescribed by the IBBI, however, since liquidation is a continuation of the Resolution Process, such criteria fixed by the IBBI can be taken into consideration by this Adjudicating Authority while fixing the fee of the Liquidator. Applying the said minimum fee structure, the Applicant is eligible for a fee of Rs. 2 Lakh per month.
It is also stated that the following expenses made by the Applicant are pending payment, which also is required to be paid to the professionals and service providers.
| Head of expense | Payable to | Amount (Rs.) |
| Publication of Public Announcement U/S 33(1)(b) (ii/Reg. 12 | Drisya Communications (Advt. Agency) | 83,076.00 |
| e-voting charges | eibc voting e-voting Service Provider | 5,900.00 |
| Valuation fees | Registered Valuers | 1,05,400.00 |
| Total | 1,94,376.00 |
In the above circumstance the Applicant filed this application.
FINDINGS: -
We have heard the learned counsel for the Applicant and perused the entire case records/documents. We have also gone through the evidence on record. To arrive at a concrete conclusion in this matter, we have gone through the resolution at Item No. 7A in the 3rd SCC meeting is quoted hereunder: -
“RESOLUTION: Resolved to propose replacement of the Liquidator with Sri. P.R.Sreenivasan after recording reasons in terms of Regulation 31A(11) of the Liquidation Regulations as lack of consensus on Liquidation cost/estimates”
It is seen from the record that the SCC, with a 94.30% majority vote, has resolved to replace the present Liquidator. As per the commercial wisdom of the creditors, which is paramount in insolvency proceedings, this Tribunal sees no legal impediment in approving the replacement of the Liquidator.
Thereafter, we have gone through Regulation 4 (2)(a) of the IBBI (Liquidation Process) Regulations, 2016, which deals with the Liquidator’s fee, quoted hereunder: -
Regulation 4 (2)(a):-
Liquidator’s fee:
(2)In cases other than those covered under sub-regulation (1) and (1A), the liquidator shall be entitled to a fee-
(a)at the same rate as the resolution professional was entitled to during the corporate insolvency resolution process, for the period of compromise or arrangement under section 230 of the Companies Act, 2013 (18 of 2013); and
It is seen from the record that the remuneration of the Liquidator is not fixed therefore he is entitled to get his fees as per Regulation 34 B (2) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 which is quoted hereunder: -
Regulation 34B (2):
Fee to be paid to interim resolution professional and resolution professional.
(2)The fee of the interim resolution professional or the resolution professional, appointed on or after 1st October 2022, shall not be less than the fee specified in clause 1 for the period specified in clause 2 of Schedule II:
Afterward we went through the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 Schedule-II. As per Schedule II, we are of the considered opinion that the Liquidator is eligible to receive Rs. 200,000/- (Rupees Two Lakhs Only) per month.
Next, we peruse Section 35(1)(i) of IBC, 2016, which deals with the Powers and duties of the liquidator, and Section 7(1) of the IBBI (Liquidation Process) Regulations, 2016 which are quoted hereunder: -
Section 35(1)(i) of IBC, 2016: -
Powers and duties of liquidator.
(1)Subject to the directions of the Adjudicating Authority, the liquidator shall have the following powers and duties, namely: -
(i)to obtain any professional assistance from any person or appoint any professional, in discharge of his duties, obligations and responsibilities;
Regulation 7(1) of the IBBI (Liquidation Process) Regulations, 2016 :-
Appointment of professionals.
(1)A liquidator may appoint professionals to assist him in the discharge of his duties, obligations and functions for a reasonable remuneration and such remuneration shall form part of the liquidation cost.
In this instant case we understood that the Applicant appointed 2 professionals Mr. Harikrishnan S., and Smt. Clodia George from the date of commencement of the Liquidation Process. It is also seen from the records that the fee proposed by the Professionals was rejected by the SCC with a 93.37% vote in the 3rd meeting of the SCC held on 27.02.2025 as Item No. 10. No specific reason has been given for such rejection. There should have been a specific reason by the SCC for such rejection. It appears that the SCC has rejected such a claim without due application of mind and deliberations. So, this Adjudicating Authority would be required to proceed in accordance with IBBI Regulations.
Considering the provisions of the Insolvency and Bankruptcy Code, 2016, and the IBBI (Liquidation Process) Regulations, 2016, this Adjudicating Authority finds merit in the application. The Stakeholders’ Consultation Committee (SCC), with a majority vote of 94.30%, has resolved to replace the present Liquidator, Sri. K.C. Padmakumar, with Sri. Sreenivasan P.R., having Registered No. IBBI/IPA-001/IP-P-02174/2021-2022/13722, office at PSDY & Associates Plot No.9-A, Deepam, Skyline Citypark Apartment, Jawahar Nagar, Kadavanthra Ernakulam, Kerala- 682 020. E-mail: - [email protected] is appointed as Liquidator, to carry out functions as mentioned under the Insolvency and Bankruptcy Code, 2016, and IBBI (Liquidation Process) Regulations, 2016. Regulation 31A (11) IBBI (Liquidation Process) Regulations, 2016 such a recommendation holds validity. Further, as per Regulation 34B of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the minimum prescribed fee for an insolvency professional handling claims between Rs. 50 Crores and Rs. 500 Crores is Rs. 2 Lakhs per month, which is reasonable in the present case.
Additionally, the Liquidator’s appointment of professionals, including a Chartered Accountant at Rs. 10,000 per month and secretarial assistance at Rs. 15,000 per month, is in accordance with Section 35(1)(i) and Regulation 7(1) of the IBBI Regulations, making such costs an essential part of the liquidation process. However, payment to these persons would be permissible only for the period they actually rendered their service to the liquidator or until the Stakeholders’ Consultation Committee passed resolution to discontinue the service of the liquidator, whichever is earlier, that too on the furnishing of documentary proof to the Stakeholders’ Consultation Committee. The Stakeholders’ Consultation Committee would pay the amount after being satisfied with the proof so submitted.
The period of payment for the applicant would be from his appointment till the Stakeholders’ Consultation Committee passed the resolution for the change of the liquidator.
With the aforesaid observation, IA(IBC)/79/KOB/2025 IN CP(IBC)/54/KOB/2022 is allowed. In view of the aforesaid observations, the following orders are passed: -
The present Liquidator, Sri. K.C. Padmakumar is hereby replaced, and Sri. Sreenivasan P.R. is appointed as the Liquidator of the Corporate Debtor, as resolved by the Stakeholders’ Consultation Committee.
Further, the remuneration of the outgoing Liquidator is fixed at Rs. 2 Lakh per month for the period he has served, in line with the minimum fee prescribed by the IBBI for the Corporate Insolvency Resolution Process.
The professional fees of Rs. 10,000 per month for the Chartered Accountant and Rs. 15,000 per month for secretarial assistance are also approved for the period they have worked.
The Liquidation cost should also be paid by the Stakeholders’ Consultation Committee subject to the production of an invoice/proof of payment before the Stakeholders’ Consultation Committee.
The parties are directed to comply with this order within 30 days from the receipt of this order.
The Registry is hereby directed to send e-mail copies of the order forthwith to all the parties and their counsel for information and to take necessary steps.
Let the certified copy of the order be issued upon compliance with requisite formalities.
File be consigned to records.