S Rajagopal, Liquidator of Sri Vari Metal Works (P) Ltd. vs Punjab National Bank & Ors.

A very trifle issue which is under consideration in the instant Company Appeal, where the Appellant liquidator, puts a challenge to the impugned order dated 21.10.2024, as it has been passed by the Learned Adjudicating Authority of the NCLT, CH-I, Chennai Bench, in IA(IBC)/1491(CHE)/2024 in IA (IBC)/1776(CHE)/2023 in CP/549/IB/2017, the Appellant/Applicant, in the capacity of being a liquidator has sought relief with regards to the clarification regarding the settling of the fee, which the liquidator contends that otherwise he would be entitled to receive for, as per monthly remuneration, in the light of the provisions contained under Regulations 39D of IBBI Regulations, 2016, the relief which has been sought for in the said IA, is extracted hereunder: -

When the said application came up for consideration before the Learned Adjudicating Authority, the same was contested and opposed by the present Respondent No. 1 herein who was Respondent No. 4, before the Learned Adjudicating Authority and the Learned Adjudicating Authority while considering the aforesaid clarification application, as sought for and after considering the rival contentions, has rejected the same on the ground that the money has been realised and the distribution has to be made, the Appellant directed to proceed as per the code and the regulations governing the field with regards to the payment of the liquidation fee and expenses.

In fact, instead of venturing to address upon the merits of the matter and objection taken by the Respondent from the perspective that, the issue would be as to whether at all the provisions contained under Regulations 39D of IBBI Regulations, 2016, would at all be made applicable, which happens to be inserted by way of a subsequent amendment made under the regulations and according to his argument, the determination of fee of the liquidator as per the IBBI precedent law would be falling within the ambit of the Regulation 4 of the Regulations, 2016, as applicable for the purposes of determination of fee of the liquidator which would be falling within the ambit of the Regulation 4 of the Regulations as applicable for the determination of fee for the liquidator. This argument could have been appreciated subject to the condition that the Learned Adjudicating Authority has recorded its finding on merits with regards the applicability of the Regulation particularly Regulations 39D of IBBI Regulations, 2016, which is being argued otherwise by the Learned Counsel for the Respondent.

Since, the Impugned Order passed in IA(IBC)/1491(CHE)/2024, is not an expression given or finding recorded by the Learned Adjudicating Authority on the merits of the application of clarification filed by the Appellant. This Appellant Tribunal proceed to hear the matter finally with the consent of the Learned Counsel for the parties on merits, exclusively on the ground that, since the implication of an interplay of the Regulations 39D of IBBI Regulations, 2016 and Regulation 4 has not been considered by the Leaned Adjudicating Authority and no finding has been recorded in the Impugned Order in co-relation to the relief prayed for by the Applicant in his IA(IBC)/1491(CHE)/2024, the Impugned Order would hereby could be held to be without consideration of all facts of law and hence would stand quashed and the matter is remitted back to the Learned Adjudicating Authority, to re-decide the application, being IA(IBC)/1491(CHE)/2024, afresh after considering the rival contentions, which have been legally agitated, as to whether at all the Appellant would be entitled for the fixation of fee based upon the monthly remuneration in the light of the application of Regulations 39D of IBBI Regulations, 2016, as prayed for and what would be the parameters as per the prevailing law, which would be made applicable for the purposes of determining the Liquidator’s fee on that basis, or same deserved determination as per Regulation 4 of the Regulations.

It is made clear that, this Appellate Tribunal has not expressed any opinion on the merits of the matter, it will be exclusively open for the Learned Adjudicating Authority, to decide the IA after considering the implication of the regulations governing the parameters for the determination of the fee, after hearing the rival contentions of the parties to the application. It goes without saying that the contentions of the respective parties to be agitated before the Learned Adjudicating Authority would be unfettered.

Accordingly, the Company Appeal would stand allowed the impugned order would stand quashed and the matter is remanded back for its fresh decision.