TaxTMI 
TaxTMI 
2020 (1) TMI 1230
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....itorial jurisdiction of this Tribunal. 2. The Operational Creditor filed this application to realize the professional fees for legal service rendered by him as a lawyer to the corporate Debtor in a case filed by the Bank for realization of Rs. 168. 78 crores with future interest @ 15.25% per annum with monthly rests from 16.12.2009 filed before the Debt Recovery Tribunal, Ernakulam (In short 'DRT'). The case O.A. No. 19/2010 filed by consortium banks State Bank of Travancore, Punjab National Bank & State Bank of India against the Corporate Debtor viz; Kerala State Cashew Development Corporation Ltd. (KSCDC) before DRT, Ernakulam claiming Rs. 168.78 Crores with future interest @ 15.25% per annum with monthly rests from 16.12.2009. Submissions by Operational Creditor: 3. The Operational Creditor stated that he was engaged as Standing Counsel for KSCDC in the High Court of Kerala from the year 2002 till 2017. During that period the case was filed in the DRT, Ernakulam in the year 2010. The Operational Creditor defended the Original Application before the DRT diligently and after about more than 7 years of conducting the case, it was settled out of court for Rs. 80 Crores as....
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....e any operational debt to the applicant. The counsel for the Corporate Debtor also claimed that there is 'existence of dispute' and this Insolvency petition is not maintainable. 9. The counsel for the Corporate Debtor stated that no reply pursuant to Demand Notice by the Corporate Debtor will not take away the right to take plea of 'existence of dispute' before the Adjudicating Authority at the time of admission of application under Section 9 of the IBC. The Corporate Debtor admitted that the applicant rendered legal services in a case filed by the Bank for realization of Rs. 168.78 Crores along with interest before the DRT, Ernakulam. 10. The counsel submitted that the claim was settled through negotiations conducted during a high-level meeting convened by the Hon'ble Chief Minister of Kerala for Rs. 80 Crores, even compromising the principal amount lent by the banks. It is stated that the settlement was a result of meeting convened by the Hon'ble Chief Minister of Kerala and was not of the efforts of the applicant. The counsel stated that the case before DRT had not progressed much due to several adjournments and was at the hearing stage when the aforesa....
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....respect of his claims. A file vide No. IND-K2/51/2019/IND is also pending before the Hon'ble Government of Kerala. 15. The Corporate Debtor further claimed that they never agreed to pay the final bill for Rs. 4,19,20,000/- which the petitioner unilaterally raised without any agreement or basis. The counsel denied that the Corporate Debtor acknowledged the debt through 06.03.2019. They have nowhere in toto made an acknowledgement encapsulating the services rendered by the Corporate Debtor both done and not done. Thereby, pleased to dismiss this petition. Reply Affidavit by the applicant: 16. The applicant in his reply affidavit against the counter submitted that a lawyer conducting the case on behalf of any organisation, including the Corporate Debtor is entitled to be remunerated for professional services as a just and reasonable basis. Even if it is true that there is no agreement between the applicant and Corporate Debtor, either express or implied, the bill raised by the applicant were honoured and payments effected except this particular case, i.e., O.A 19/2010. 17. The counsel for the applicant in its reply stated that as far as amount of fee payable to lawyers is conc....
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....t standing counsel mutually agreed upon by him and the Corporate Debtor is not applicable to the applicant herein, as no such schedule of fees agreed by the applicant and the Corporate Debtor is in existence. 23. The applicant further denied the contention of the Corporate Debtor that the applicant is taking revenge for discontinuing him from standing counsel ship in 2017 and prayed to reject the counter in toto. Findings: 24. We have gone through the pleadings on record and perused the submissions made by learned counsel for both sides. Merely relying on the claim made in the application and ordering CIRP will defeat the very purpose of the Code. Given the severity of the consequences that follow on initiation of insolvency proceedings against a company, it is important to safeguard against the exploitive use of the Code. 25. To arrive at a decision, we rely on the Hon'ble Supreme Court judgement in Mobilox Innovations Pvt. Ltd. Versus Kirusa Software Private Limited; 2018 1 SCC 353, in which the law is well settled and crystallised. To quote: "25. therefore, when examining an application under Section 9 of the Act, will have to determine the following: - (i) Whether t....
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....he fee and expenses claimed is Rs. 1,06,000/- for appearing in various cases. However, the amount paid by Corporate Debtor is Rs. 85,000/-, which already includes the fee for drafting and filing petition in O.A. 19/2010 before the DRT, Ernakulam which amounts to Rs. 10,000/-. On 02.05.2014, the fee and expenses claimed is Rs. 1,30,000/- for various appearances during that year. On 19.08.2015, the fee and expenses claimed by the applicant is Rs. 25,000/- in respect of drafting, filing and arguing for admission W.P.25502/2015. On 14.10.2015, two bills raised for fee and expenses amounts to Rs. 75,000/- and 1,75,000/- each. We further observed that, out of the two bills, one bill dated 14.10.2015 is totally in connection with the O.A/19/2010 before the DRT for appearance or arguments on various dates. On 04.04.2017, Rs. 55,000 was claimed by the applicant as professional fee in drafting, discussion and settlement of pleadings and to obtain stay in W.P.27694/2016. In some of the bills, even the amount claimed by the applicant was also not paid by the Corporate Debtor. Even in such case also, the applicant has not raised any objection nor quoted any service rules as being claim....
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....has communicated his claim of fee on percentage basis on various dates 18.07.2014, 12.08.2015, 15.12.2017,13.08.2018, 11.10.2018 and 06.02.2019. However, the Corporate Debtor vide letter dated 06.03.2019 has clearly mentioned that they have been paying Rs. 13,500/- per case for their Standing Counsel so far and pointed out that the applicant was paid Rs. 3,60,000/- in the present case before DRT. They also pointed out the grave financial situation of the Corporate Debtor and its accumulated losses. and requested to settle for the already paid amount in the case. 36. From the above, it can be safely concluded that there is no consensus between the parties on the fee structure which tantamount to a 'difference of opinion', which we concluded as a 'dispute'. This conclusion is also cemented by the fact that, nowhere the Corporate Debtor has given his consent or agreed for the fee structure as claimed now. This is an unilateral claim made by one party on the other without any proof of agreement or agreed fee structure in place. Mere intimation by one party to the other, regarding his intention to claim his fee does not amount to agreement. The communication from the Co....
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....ferent from an Original Suit under the Civil Court. Therefore, if High Court Rules regarding fee payable is applicable, that it is rule 16 of the said Rules, that will apply to the instant case (Original Application) and not Rule 6, which governs fee payable for suits for money (Original suits). However, the Learned Senior Counsel for the applicant, in his averments stated that it is the misconception of the Corporate Debtor to raise such a contention. Moreover, the Rules Regarding Fee payable to Advocates is not exhaustive or there is no prohibition in the rules to apply to cases conducted in other forums or Tribunals. 39. In the light of above contentions made by the parties, we have fallen back on the following judgements to arrive at a decision in this regard: i. United India Insurance Co. Ltd. V. Padmini Amma, ( 1986 KLT 581 : 1987 61 CompCas 222 Ker), wherein it is quoted as: ".The Motor Accidents Claims Tribunal is not a "court" and it is not a court subordinate to the High Court either (See Beeran v. Rajappan [1980] KLT 210 (DB)). We agree with the contentions raised by the Corporate Debtor that the rules regarding fees payable to advocates framed by the High Court, rel....