2026 (3) TMI 416 - AT - IBC

Liquidator Fee Rates: third-bucket rates apply where realisations occur after one year; excess withdrawals refundable with GST and interest.

Entitlement to liquidator fees turned on the applicable time-based buckets in Regulation 4(2) of the CIRP (Liquidation) Regulations, 2016; the ... Entitlement to liquidator fees at the rates of the first/second bucket or third bucket under Regulation 4(2) of the CIRP (Liquidation) Regulations, 2016 - calculation of fee according to time-based buckets - refund of excess fees withdrawn from liquidation estate - condonation of delay in re-filing appeal. Condonation of delay in re-filing appeal - Application for condonation of 56 days delay in re-filing the appeal. - HELD THAT:- The Tribunal examined the application seeking condonation of delay and found sufficient cause as stated in the re-filing application. On that basis the delay in re-filing the appeal was condoned. Delay in re-filing the appeal is condoned. Entitlement to liquidator fee under Regulation 4(2) - Whether the erstwhile liquidator was entitled to fees at the rates claimed (first/second bucket) or only at the third-bucket rates because realisation occurred after one year, and whether excess amounts withdrawn must be refunded. - HELD THAT: - The Adjudicating Authority analysed the invoices, the period of realisation and the exemptions claimed by the applicant, and after excluding recognised exempt periods held that effective realisation fell after one year. The applicant sought additional exclusion for a 141-day period relating to resumption of auctions after a medical incident, but the Tribunal found no basis to treat that 141-day interval as an excluded period that would alter the calculation. Applying Regulation 4(2) and the time-bucket structure, the Adjudicating Authority correctly computed the fees at the third-bucket rates. The amounts withdrawn in excess of the correctly payable fee were found to have been wrongfully taken from the corporate debtor and ordered to be refunded with applicable GST and interest as determined by the Adjudicating Authority. The Tribunal found no error in that reasoning or calculation and declined to interfere. The appellant is only entitled to fees as determined under the third bucket; the excess amounts withdrawn are liable to be refunded; the challenge to the Adjudicating Authority's exclusion of claimed periods is rejected and the appeal is dismissed. Final Conclusion: Condonation of the re-filing delay is allowed. On the substantive dispute, the Tribunal upholds the Adjudicating Authority's finding that realisation occurred after one year, affirms calculation of fee under the third bucket, rejects the appellant's additional exclusion of 141 days, and confirms that excess fees withdrawn must be refunded; the appeal is dismissed. Issues: Whether the appellant (erstwhile resolution professional) was entitled to liquidator fees at the rates of the first/second bucket or third bucket under Regulation 4(2) of the CIRP (Liquidation) Regulations, 2016 and whether amounts withdrawn in excess are liable to be refunded with GST and interest.Analysis: The adjudicating authority examined the invoices and the appellant's computation and excluded an aggregate period of 495 days (including COVID-19 related closure and other claimed exemptions) for determining the effective period of liquidation. The appellant sought additional exclusion of 141 days for resumption of auctions after a medical accident; that exclusion was not supported by record. On the appellant's own timeline the realisations occurred after one year from the liquidation commencement date and therefore the applicable fee rates correspond to the third bucket under Regulation 4(2). Detailed arithmetic in the impugned order applied the third-bucket percentages to the net realisations and distributions, computed total fees payable, compared the sum already withdrawn by the appellant, and identified an excess withdrawal. The adjudicating authority directed refund of the excess amount plus GST and interest at 12% p.a. where not paid within the prescribed period.Conclusion: The appellant is not entitled to fees at the first or second bucket rates; fees are payable as per the third bucket under Regulation 4(2) of the CIRP (Liquidation) Regulations, 2016. The amounts withdrawn in excess are liable to be refunded with GST and interest. The appeal challenging the order is dismissed and the adjudicating authority's calculation and refund direction are upheld.