TaxTMI 
TaxTMI 
2021 (9) TMI 746
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....bution of CIRP & liquidation cost, pursuant to sec 53 of IBC, 2016 read with regulation 42 of IBBI (Liquidation Process) Regulations, 2016 between the secured creditors. Whether it should charge in the percentage of claim admitted or in the percentage of realization. II. To decide whether as per regulation 2A of IBBI (Liquidation Process) Regulations, 2016 i.e., amended on 25.07.2019 and not applicable on the liquidation proceedings of this company, as per the IBBI circular, the financial institution (unsecured creditor) who was the CoC member during the period of CIRP, is liable to pay the CIRP & Liquidation Cost u/s. 53 of IBC, 2016. If yes, then what should be the ratio. III. To decide, whether the period of dispute between liquidator & secured creditor should be excluded, to calculate of percentage of fees of liquidator, dependent on such period, considering the intent of legislature under regulation 21A of IBBI (Liquidation Process) Regulations, 2016. IV. To decide whether the secured creditor, who has realized from the property u/s. 52 of IBC, 2016 is liable to pay the liquidation cost i.e., incurred after the date of realization till dissolution of....
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.... 2016 by SIDBI by excluding the period during which the issues between liquidator and SIDBI remained pending and were finally decided by this Honble Tribunal. v. The subject matter of the First issue on which the applicant has filed the application for, is to decide the percentage of distribution of CIRP & liquidation cost, pursuant to sec 53 of IBC, 2016 read with regulation 42 of IBBI (Liquidation Process) Regulations, 2016 between the secured creditors. Whether it should charge in the percentage of claim admitted or in the percentage of realization. For the above said issue the applicant has submitted that there is no specific provision to take the base of amount for calculation for distribution of CIRP & Liquidation Cost under the provision of IBC, 2016 and regulations made thereunder. The respondent No. 1 has only raised the objection to take the base of percentage for distribution of CIRP & Liquidation Cost on the bases of realization. However, the other respondents No. 2 & 3 being secured creditors are agreeable to the calculation done by the applicant, for distribution of CIRP & Liquidation Cost, by taking the base of realization. Further, the respondent No. 2 also....
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....legislature under regulation 21A of IBBI (Liquidation Process) Regulations, 2016. x. The applicant stated that the Respondent No. 1 had not timely intimated the price pursuant to regulation 37 of IBBI (Liquidation Process) Regulations, 2016, hence not allowed the applicant to sell the assets at per the price intimated by Respondent No. 1 via mail dated 08.03.2019, not agreed to pay the contribution towards the CIRP & Liquidation Cost, neither timely responded to the mails of the applicant. The applicant further submitted that the respondent No. 1 agreed to pay the CIRP & Liquidation Cost only after the applicant has approached to this Hon'ble Bench. Therefore, the applicant submitted that under Regulation 21A of IBBI (Liquidation Process) Regulations, 2016 the applicant is eligible to get the fees within the slab of six months period as per table given in Regulation 4 of IBBI (Liquidation Process) Regulations, 2016, by excluding the period spent in the proceedings between the applicant and SIDBI. xi. The fourth issue to be decided by the Hon'ble Tribunal is whether the secured creditor, who has realized from the property u/s. 52 of IBC, 2016 is liable to p....
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.... submitted by SIDBI for the aforesaid property; the Respondent No. 1 alleges that instead of releasing the secured property to SIDBI; the Liquidator chose to illegally mandate upon SIDBI a pre-condition of submitting an illegal Undertaking in order to realize its Secured Property. iv. The Respondent No. 2 states that there was no delay on the part of Respondent to realize its secured assets. Further, the Respondent states that the Liquidator had not realized the secured property in question on time until the Hon'ble Tribunal ordered to do so on 24.02.2020 during the course of hearing of CA/135/2019 filed by Liquidator. v. The Respondent No. 1 further submitted that the Liquidator had made unsuccessful attempt earlier to sell the said secured property by way of e-Auction directly, despite SIDBI's objection. Therefore, whatever delay has occurred, has occurred due to applicant's acts or omissions and SIDBI cannot be blamed for it. The Respondent submitted that there is no legal basis under the code to claim any exclusion of time for the period of legal proceedings in order to calculate the percentage of fees of liquidator dependent on such period. ....
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....urther it was submitted by the Respondent No. 2 that the Respondent No. 1 caused unnecessary delay in the successful liquidation of the corporate Debtor by causing delay in selling its secured assets. iv. The Respondent No. 2 stated that it should not be overburdened with the Liquidation cost on the part of the delay caused by the Respondent No. 1 in realizing its security interest. 4. We have gone through the documents filed by the applicant and the Respondents and heard the arguments advanced by the Learned counsels for the applicant as well as the Respondents. The applicant/Liquidator has prayed for seeking the directions mainly in the four issues. The first issue was to decide the percentage of distribution of CIRP & liquidation cost, pursuant to sec 53 of IBC, 2016 read with regulation 42 of IBBI (Liquidation Process) Regulations, 2016 between the secured creditors. Whether it should be charge in the percentage of claim admitted or in the percentage of realization. From the perusal of the application and the replies filed by the Respondents it is clear that the said direction is prayed pursuant to section 53 of IBC, 2016 read with regulation 42 of IBBI (Liquidation....
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....l of the section 53 of the IBC, 2016 that the proceeds from the sale of the Liquidation assets shall be distributed in such an order that the Insolvency resolution process cost and Liquidation cost to be paid in full in the first and the foremost priority, along with that the Regulation 42 of IBBI (Liquidation Process) Regulations, 2016 clearly specifies that the Liquidation cost shall be deducted before the distribution is made. Whereas, in the present case in hand the applicant submits that the Respondent No. 1 i.e., SIDBI has not paid the contribution towards the CIRP and Liquidation cost except Rs. 60,000/-. The applicant further submitted that the Respondent No. 2 and Respondent No. 3 have not raised any objection to the calculation shared by the applicant in regard to the share of liquidator fee. The Liquidator fee as specified in section 53(3) of IBC, 2016 states that: "(3) The fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each class of recipients under sub-section (1), and the proceeds to the relevant recipient shall be distributed after such deduction." Thus, it is specifically stated in the above stated section t....
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....n Process) Regulations, 2016 does not stand any merit. 6. The third issue for which the Applicant/Liquidator seeks the Tribunal's directions is, whether the period of dispute between liquidator & secured creditor should be excluded, to calculate of percentage of fees of liquidator. Since, the Applicant/liquidator successfully listed out the circumstances due to which the delay in completion of Liquidation process has taken place along with the Directions which the Applicant/Liquidator sought from the Adjudicating Authority in respect to the disputes arisen with the Respondent No. 1 i.e., SIDBI hence, the period of dispute between the secured Creditor and the Liquidator is excluded as the applicant successfully shown his bona fide for the delay in completion of Liquidation Process. 7. Lastly, the Applicant/Liquidator seeks the Tribunal's direction, whether the secured creditor, who has realized from the property u/s. 52 of IBC, 2016 is liable to pay the liquidation cost. In the present matter in hand the applicant/Liquidator submitted that the Respondent No. 3 i.e., Corporation Bank raised the objection to bear the Liquidation cost incurred after the date i.e., 16.01.2....