TaxTMI 
TaxTMI 
2021 (12) TMI 914
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.... Corporate Debtor entered into Listing Agreement dated 30.11.1993 with the BSE - the Appellant. (ii) The case of the Appellant was that Corporate Debtor defaulted in making payment of listing fees as per Clause 38 of the Listing Agreement. Invoice dated 1st April, 2017 for an amount of Rs. 8,85,526 for the Annual Listing Fees payable for the year 2017-18 and arrears payable upto 2016-17 was demanded. (iii) The Corporate Debtor opposed the Application and prayed that the same may be dismissed at the threshold on the ground of maintainability. The defence of the Corporate Debtor was that listing fees, which is claimed by the Operational Creditor is not an operational debt but a fee payable in pursuance to Regulation 14 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The fee is a 'regulatory fee' and cannot be termed as an 'operational debt'. The Application filed by the Appellant was not maintainable. (iv) The learned Adjudicating Authority after considering the submissions of the parties and after referring to Report of the Insolvency Law Committee, rejected the Application under Section 9 holding that dues of 'regulatory fee' cannot be termed as a....
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....y resolution of corporate persons. The preamble of the Code states: "An Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto." 7. The Hon'ble Supreme Court time and again held the purpose and object of IB Code is insolvency resolution of corporate debtor and not the recovery of dues of creditors. In (2019) 4 SCC 17, Swiss Ribbons Private Limited & Anr. vs. Union of India and Ors., Supreme Court in paragraph 28 has laid down following: "28. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the ....
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.... following effect: "1.9 Finally, the Committee concluded that the current definition of 'financial debt' is sufficient to include the amounts raised from home buyers/ allottees under a real estate project, and hence, they are to be treated as financial creditors under the Code. However, given the confusion and multiple interpretations being taken, at this stage, it may be prudent to explicitly clarify that such creditors fall within the definition of financial creditor, by inserting an explanation to Section 5(8) of the Code. Accordingly, in CIRP, they will be a part of CoC and will be represented in the manner specified in paragraph 10 of this report, and in the event of liquidation, they will fall within the relevant entry in the liquidation waterfall under section 53. The Committee also agreed that resolution plans under the Code must be compliant with applicable laws, like RERA, which may be interpreted through section 30(2)(e) of the Code. It may be noted that there was majority support in the Committee for the abovementioned treatment of home buyers. However, certain members of the Committee, namely Sh. Shardul Shroff, Sh. Sudarshan Sen and Sh. B. Sriram, differed on this m....
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.... pay the penalty imposed by the adjudicating officer or fails to comply with any of his directions or orders, he shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to ten years, or with fine, which may extend to twenty-five crore rupees or with both." 1.18 With respect to point (ii), the Committee noted that prior to the coming into force of the Code, preferential payments in relation to winding up of companies was governed by section 327 of the Companies Act, 2013 ("CA 2013") (the corresponding provision in the Companies Act, 1956 ("CA 1956") was section 530). Neither section 327 of the CA 2013 nor section 530 of the CA 1956 provided any preferential treatment to regulatory dues and only covered "all revenues, taxes, cesses and rates due from the company to the Central Government or State Government or to a local authority at a relevant date...". 1.19 Moreover, the overarching intention of the Code to prioritize debts owed to unsecured financial creditors was sufficiently clear from the Preamble to the Code. In this regard, the Report of the BLRC Volume 1 (2015) ("BLRC Report") states as follows: "The Committee has re....
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.... then the entire purpose of the object of the IB Code will be lost and insolvency proceedings will turn into recovery proceedings for the dues of creditors, which is not the object of the IB Code, as has been laid down by the Hon'ble Supreme Court in Swiss Ribbons Private Limited and Anr. (supra) and other judgments. 16. We may now refer to Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, in which Regulation 28 provides that the recognized Stock Exchange and recognized Clearing Corporation shall segregate its regulatory departments from other departments in the manner specified in Part-C of Schedule-II of the Regulations. For ready reference Regulation 28 is extracted as follows: "Segregation of regulatory department 28. The recognized stock exchange and recognized clearing corporation shall segregate its regulatory department from other department in the manner specified in Part-C of Schedule-II of these regulations." 17. Part-C of the Regulation, which contains 'Measures to ensure segregation of regulatory departments, item 3 of which is as follows: (3) Department handling the following functions shall be considered as regul....