Tribunal rules on liquidation costs liability, grants access to financial info

The Tribunal concluded that the Applicant is liable to pay its share of liquidation costs as determined by the Liquidator, rejecting the Applicant's arguments regarding the timing and proportion of payment. The Tribunal also ruled that the Applicant is entitled to financial information and documents from the Liquidator, except for the asset memorandum. The Tribunal dismissed the Applicant's request to set aside the letter regarding liability to pay costs and directed the Liquidator to provide necessary information and documents to the Applicant in line with other stakeholders.

---

---

Issues Involved:
1. Liability to pay corporate insolvency resolution fees and liquidation costs.
2. Proportion and timing of liquidation costs payment.
3. Access to financial information and documents from the Liquidator.

Issue-wise Detailed Analysis:

1. Liability to pay corporate insolvency resolution fees and liquidation costs:
The Applicant sought relief to set aside the letter dated 18.07.2021 issued by the Respondent and to declare that the Financial Creditor is not liable to pay corporate insolvency resolution fees for the process of Biodiversity Conservation India Private Limited. The Tribunal analyzed Section 53(1)(a) of the Insolvency and Bankruptcy Code, 2016, and Regulation 21A of the IBBI (Liquidation Process) Regulations, 2016. It concluded that the Applicant is indeed liable to pay its share of liquidation costs as determined by the Liquidator, rejecting the Applicant's contention that it is not required to pay these costs at all or only from the date of claim admission.

2. Proportion and timing of liquidation costs payment:
The Applicant argued that it should pay liquidation costs only from 04.04.2021 (the date its claim was admitted) and in proportion to the amounts actually recovered, not in proportion to its admitted claim. The Tribunal found no support for this contention in the I&B Code, 2016, or any applicable regulations. It stated that the Applicant must pay its share of liquidation costs without reference to the date of claim admission or the amounts recovered, thus rejecting the Applicant's argument regarding the timing and proportion of payment.

3. Access to financial information and documents from the Liquidator:
The Applicant requested various documents and financial information from the Liquidator, which the Liquidator initially refused to share. The Tribunal examined Regulations 5 and 6 of the IBBI (Liquidation Process) Regulations, 2016. It concluded that although the Applicant chose to stand outside the liquidation proceedings and realize its security interest, it is still entitled to the same information and documents as any other stakeholder. The Liquidator must provide the preliminary report, all progress reports, sale reports, and minutes of stakeholder meetings to the Applicant. However, the Tribunal denied the Applicant's request for the asset memorandum, citing its confidential nature and potential adverse impact on liquidation sales.

Conclusion:
The Tribunal disposed of I.A. No. 245 of 2021 with the following orders:
- The Applicant's reliefs regarding the liability to pay costs as detailed in the letter dated 18.07.2021 are rejected.
- The Liquidator is directed to share information and furnish documents to the Applicant on par with any other stakeholder of the liquidation process.

---