TaxTMI 
TaxTMI 
2025 (9) TMI 1096
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....he IBBI (Liquidation Process) Regulations, 2016 ('Liquidation Regulations'), Regulation 7(2)(a) and 7(2)(h) of the IBBI (Insolvency Professionals) Regulations, 2016 ('IP Regulations') read with Clauses 1, 2, 3, 14, and 25 of the Code of Conduct provided in the First Schedule of the IP Regulations ('Code of Conduct') and has proceeded to suspend the registration of the Petitioner for a period of two years from 18.08.2022 (effective from 16.09.2022) and directing refund of half of the fees paid to the Deloitte Touche Tohmatsu India LLP ('DTTILLP'). 2. The facts leading to the filing of the present Petition are as follows: i. The Petitioner is a qualified Chartered Accountant registered with the Institute of Chartered Accountants of India having Membership No. 045857. He is registered with IBBI as an Insolvency Professional vide Registration No. IBBI/IPA-001/IP-00239/2017-2018/10468 having his IBBI registered address at 19th Floor, Shapath-V, SG Road, Ahmedabad, Gujarat - 380015. ii. The Petitioner was appointed as the Interim Resolution Professional ('IRP') of Lanco by the National Company Law Tribunal ('NCLT'), Hyderabad Bench vide Order dated 07.09.2017 and he ....
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...."), the NCLT, Ahmedabad vide Order dated 04.03.2020 admitted the Section 7 application filed by State Bank of India and Bank of Baroda and appointed the Petitioner as the IRP who was later confirmed as the RP. viii. As no resolution plan was approved by the CoC, the CoC passed a resolution during its 10th meeting held on 03.02.2021 for liquidation of SPPL which was later approved by the NCLT, Ahmedabad vide Order dated 10.03.2021 and one Mr. Dushyant Dave was appointed as the Liquidator. ix. An Inspection Order was passed by an Assistant General Manager of the Respondent on 12.10.2020 under Section 196 of the Code read with Regulation 3(1) and Regulation 3(3) of the IBBI Inspection and Investigation Regulations, 2017 ('Inspection Regulations'), directing the Inspecting Authority (hereinafter referred to as "IA") to conduct an inspection of the assignments undertaken by the Petitioner. x. The Petitioner received the Notice of Inspection on 13.10.2020 wherein the Petitioner was informed that the IA had initiated an inspection of all the assignments handled by the Petitioner. xi. The Petitioner received a Draft Inspection Report ('DIR') under Sectio....
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....before this Court in W.P.(C) 13317/2022. xv. This Court vide Order dated 11.01.2024 came to the conclusion that the investigation report had not been handed over to the Petitioner which is in violation of the procedure laid down by the Respondent/IBBI. The Order dated 04.07.2022 was, therefore, set aside and the matter was remanded back to the Respondent for fresh consideration. xvi. On 18.01.2024, the Respondent provided a copy of the Final Inspection Report dated 07.04.2022 to the Petitioner along with an addendum to the DIR dated 23.12.2021. xvii. The Petitioner submitted his substituted response to the SCN on 01.02.2024. xviii. In due course, vide email dated 13.02.2024, the Respondent apprised the Petitioner regarding the date of hearing before the Disciplinary Committee ('DC') on 19.02.2024. xix. Pursuant to the personal hearing on 19.02.2024, the DC vide email dated 20.02.2024 sought certain additional information from the Petitioner. The Petitioner vide email dated 21.02.2024 submitted his response to the queries and requested for a personal hearing to explain his responses. Accordingly, a hearing was scheduled on 27.02.2024, and....
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....ome into force after 30 days from the date of this order." xxi. The Petitioner has filed the present Writ Petition to challenge this Impugned Order dated 04.03.2024. 3. The learned Senior Counsel for the Petitioner has advanced the following arguments: i. The learned Senior Counsel states that the SCN was issued by the Respondent completely without jurisdiction and in direct violation of the provisions the Code. The inspection/ investigation conducted under Section 218 of the Code is a condition precedent to imposition of any penalty under Section 220 of the Code. He submits that no SCN can be issued under Section 219 of the Code in the absence of an inspection/ investigation under Section 218 of the Code and no penalty can be imposed under Section 220 of the Code in the absence of an inspection/ investigation under Section 218 of the Code and a SCN under Section 219 of the Code. The inspection/ investigation under Section 218 of the Code is thus a condition precedent to imposition of penalty under Section 220 of the Code. ii. He states that Section 218 of the Code requires that disciplinary proceedings shall only commence in a case when there is a com....
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....carry out inspections and investigations on insolvency professional agencies, insolvency professionals and information utilities and pass such orders as may be required for compliance of the provisions of this Code and the regulations issued hereunder; (g) monitor the performance of insolvency professional agencies, insolvency professionals and information utilities and pass any directions as may be required for compliance of the provisions of this Code and the regulations issued hereunder; (h) call for any information and records from the insolvency professional agencies, insolvency professionals and information utilities; (i) publish such information, data, research studies and other information as may be specified by regulations; (j) specify by regulations the manner of collecting and storing data by the information utilities and for providing access to such data; (k) collect and maintain records relating to insolvency and bankruptcy cases and disseminate information relating to such cases; (l) constitute such committees as may be required including in particular the committees laid down in section 197; (m) promote t....
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....t the powers of IBBI. vi. Further the learned Senior Counsel submits that without prejudice even if IBBI has the power under Section 196(1), the same is expressly circumscribed by the requirements of Section 218 of the Code. He argues that it could not have been the legislative intent under Section 196(1) of the Code to bestow untrammelled powers to IBBI de hors checks and balances that are expressly included by the Legislature in Section 218 of the Code. The express jurisdictional fact requirements stipulated under Section 218 of the Code of there being a complaint or the existence of 'reasonable grounds to believe' are, in fact, an important check placed on IBBI without which it would be exercising untrammelled powers. He tendered judgements of the Apex Court titled, Rohtash Industries vs. S.D. Agarwal & Ors.(1969) 1 SCC 325 and Hardeep Singh vs. State of Punjab and Ors.,(2014) 3 SCC 92, to substantiate his arguments. vii. The learned Senior Counsel for the Petitioner extending the foregoing arguments, also states, that assuming that Section 196(1) (f) and (g) read with Regulation 3(1) of the Inspection Regulations confer powers on IBBI to initiate 'routine insp....
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.... to specify- (a) the procedure for claiming restitution under sub-section (5); (b) the period within which such restitution may be claimed; and (c) the manner in which restitution of amount may be made." (emphasis supplied) viii. Learned Senior Counsel states that it is settled law that a delegated power to legislate by making rules/ regulations cannot be exercised to create a substantive right over and above what the statute provides, i.e., vest powers which the statute does not give or prescribe penalties not contemplated by the statute itself. The Counsel referred the judgment of Apex Court in Kunj Behari Lal Butail and Ors. vs. State of H.P. & Ors., (2000) 3 SCC 40 to support his argument. The relevant extract is as follows: "14. We are also of the opinion that a delegated power to legislate by making rules "for carrying out the purposes of the Act" is a general delegation without laying down any guidelines; it cannot be so exercised as to bring into existence substantive rights or obligations or disabilities not contemplated by the provisions of the Act itself." ix. The learned Senior Counsel states that any report....
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....excess fee was returned by the Petitioner on 18.02.2022, which was well before 31.10.2023. xiii. He submits that the Impugned Order failed to consider the submissions of the Petitioner made on Section 233 of the Code which specifically states that no proceedings would lie against an Insolvency Professional in respect of acts carried out or intended to be carried out in good faith. He states that Section 233 of the Code takes into account the complex roles and responsibilities of the Resolution Professional/Liquidator and accordingly seeks to protect the Resolution Professional/Liquidator where the Resolution Professional/ Liquidator has acted or intended to act in good faith. The Impugned Order has not returned any finding to the effect that the Petitioner acted or intended to act in a mala fide manner, and he ought to have been granted protection envisaged under the Code. xiv. Learned Senior Counsel for the Petitioner states that other Insolvency Professionals against whom similar allegations of charging excess fee were made, namely one Mr. Rakesh Ahuja, and one Mr. Avishek Gupta, the IBBI took a considerate view and only issued a warning to be more careful in fu....
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....nsolvency and Bankruptcy Code, 2016 (Code) and regulations made thereunder having a bearing on fee and other expenses of CIRP are at Annexure A. 3. An IP is obliged under section 208(2)(a) of the Code to take reasonable care and diligence while performing his duties, including incurring expenses. He must, therefore, ensure that not only fee payable to him is reasonable, but also other expenses incurred by him are reasonable. What is reasonable is context specific and it is not amenable to a precise definition. An illustrative list of factors considered in determination of what is reasonable is given in Annexure B. 4. Para 16 of the Code of Conduct for IPs in the Schedule to the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 provides that an IP must maintain written contemporaneous records for any decision taken, the reasons for taking the decision, and the information and evidence in support of such decision. This shall be maintained so as to sufficiently enable a reasonable person to take a view on the appropriateness of his decisions and actions. 5. The IBBI had put out ....
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....r, claimant, resolution applicant, promoter or member of the Board of Directors of the corporate debtor in relation to the CIRP; (e) any penalty imposed on the corporate debtor for non-compliance with applicable laws during the CIRP; [Reference: Section 17 (2) (e) of the Code read with circular No. IP/002/2018 dated 3rd January, 2018.] (f) any expense incurred by a member of CoC or a professional engaged by the CoC; (g) any expense incurred on travel and stay of a member of CoC; and (h) any expense incurred by the CoC directly; [Explanation: Legal opinion is required on a matter. If that matter is relevant for the CIRP, the IP shall obtain it. If the CoC requires a legal opinion in addition to or in lieu of the opinion obtained or being obtained by the IP, the expense of such opinion shall not be included in IRPC.] (i) any expense beyond the amount approved by the CoC, wherever such approval is required; and (j) any expense not related to CIRP. 9. Further, the IP is directed to disclose fee and other expenses in the relevant Form in Annexure C to the Insolvency Professional Agency o....
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....were taken by the Petitioner performed the same work which could have been performed by the Petitioner or any of the team member of the Petitioner. xix. He states that such limitation does not exist in the Code, or regulations thereunder and there is no restriction in the Code for the liquidator to appoint a professional support entity. Pertinently, Regulation 7(1) of the Liquidation Regulations envisages the appointment of professionals by the liquidator for assistance. xx. The learned Senior Counsel for the Petitioner in the same vein submits that it is well settled that in any disciplinary proceedings, it is not open to the regulator to add fresh allegations or travel beyond the allegations previously levelled. The principle of audi alteram partem which enshrines the right of every person to be afforded an opportunity to be heard is fundamental to the rule of law and that every individual should be afforded the right to be heard in proceedings initiated against them. xxi. Learned Senior Counsel for the Petitioner has advanced arguments with respect to CIRP of SPPL. He submits that the findings in the Impugned Order that the Petitioner failed to comply ....
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....o. IBBI/IP/R(INSP)/2020/15/496/3218 dated 24.03.2022 issued to one Ms. Kalpana G., an Insolvency Professional ("Kalpana G. Order"). In the said matter, similar to the SCN issued to the Petitioner, the Insolvency Professional therein was asked to show cause regarding an alleged contravention of Regulation 35A of the CIRP Regulations as she had failed to file an Avoidance Application within the prescribed timeline and such application had been filed with a delay of 341 days. xxvii. In the Kalpana G. Order, in spite of holding that the Insolvency Professional had failed to perform the duty cast on her under the provisions of the Code and the Regulations thereunder, the Disciplinary Committee held that as no mala fide was established and the deficiencies as noticed and conceded by Ms. Kalpana G. appear to be minor in nature, the Disciplinary Committee disposed of the show cause notice merely with a note of caution to the Insolvency Professional to be more careful in future, in glaring contrast to the directions made in the Impugned Order. 4. Per contra, learned Senior Counsel for the Respondent advanced the following arguments: i. The learned Senior Counsel stated ....
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....lities and pass such orders as may be required for compliance of the provisions of this Code and the regulations issued hereunder; (g) monitor the performance of insolvency professional agencies, insolvency professionals and information utilities and pass any directions as may be required for compliance of the provisions of this Code and the regulations issued hereunder;" iv. The IBBI has framed Inspection Regulations in exercise of the powers conferred under Sections 196, 217, 218, 219, 220 read with Section 240 of the Code to carry out inter alia the functions under Section 196 of the Code. v. Regulation 3(1) of the Inspection Regulations empowers the IBBI to conduct inspection of such number of service providers every year, as may be decided by it from time to time and, as per Regulation 3(2), the power conferred upon the IBBI under Regulation 3(1) is expressly without prejudice to its power to direct inspection under Section 218(1) of the Code. The relevant extract from Regulation 3 of the Inspection Regulations reads as follows: "3. Inspection by the Board. (1) The Board shall conduct inspection of such number of service providers e....
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.... She states that in light of the grave and egregious contraventions that have come out upon the inspection, the Petitioner cannot take a plea that IBBI directed the IA to conduct inspection without any reasonable grounds to believe that the Petitioner had contravened any provisions of the Code or the Rules and Regulations made or directions issued by the IBBI thereunder. viii. Further, Regulation 11(2) of the Inspection Regulations provides for consideration of the inspection report and subsequent action. ix. The contention of the Petitioner that reference to Regulation 11(2) in the Impugned Order is an afterthought is totally baseless. The Inspection Regulations has been framed under Section 196 of the Code along with Section 217, 218, 219, 220. Thus, when there is material available on record along with an inspection report, the Respondent has ample power to issue a SCN under Regulation 11(2) of the Inspection Regulations. x. The SCN has been issued by the AGM to whom the power to issue the SCN had been specifically delegated by a decision taken on 16.09.2019 by IBBI. xi. The inspection has been approved by competent authority and only the comm....
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.... for a relief which already is adjudicated in his favour on his submissions in the Impugned Order. xv. The fees structure in liquidation proceedings is distinguishable from CIRP. During liquidation fees can either be fixed by CoC following the mandate under CIRP or it may be drawn as per table given in the Regulation 4 of the Liquidation Regulations. Once, it is fixed as per Regulation 4(3), the fee is to be charged for all the work to be performed by the liquidator, and which do not require domain expertise or professional help. During liquidation process the fees of the professional services is fixed by the liquidator himself. The Insolvency Professional may take into consideration the advice or suggestions of stakeholder like financial and operational creditors, but final call vests with him. Therefore, it was the Petitioner's responsibility to not have charged excessive fees during the liquidation process. xvi. The learned Senior Counsel submits that there was no predetermination of issues whatsoever in the SCN. The Petitioner's case was considered and decided strictly in accordance with the procedure prescribed by law. xvii. The learned Senior Counse....
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....be decided by the Committee of Creditors (CoC) or Stakeholders' Consultation Committee (SCC), as the case may be. If liquidators' fee is not fixed under sub-regulation (1) and (1A), clause (b) of sub-regulation (2) of Regulation 4 provides that the liquidator shall be entitled to a fee as a percentage of the amount realised net of other liquidation costs, and of the amount distributed, for the balance period of liquidation, as under: Amount of Realisation / Distribution (In rupees) Percentage of fee on the amount realised / distributed in the first six months in the next six months Thereafter Amount of Realisation (exclusive of liquidation costs) On the first 1 crore 5.00 3.75 1.88 On the next.... .... ..... ..... Amount Distributed to Stakeholders On the first 1 crore 2.5 1.88 0.94 On the next .... .... .... .... 2. Based on records examined during the inspections and investigations and interaction with stakeholders, it has been observed that different interpretations of terms highlighted above are being made by the liquidator which are being clarified below: - ....
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....Before amendment dated 25th July, 2019 to the Liquidation Regulations, the liquidation cost under Regulation 2(1)(ea) had four components. To clarify the liquidation cost, through aforesaid amendment four new components of liquidation cost were added. In some cases, it is being wrongly interpreted that these newly added four components, inter-alia, such as going concern costs etc., are to not be considered as the liquidation cost in respect of all those cases where the liquidation process commenced before the aforesaid amendment. Since these four components are paid in priority to payment to stakeholders as per section 53 of the Code by virtue of it being liquidation cost under section 53(1)(a), these newly added components were always part of the liquidation cost irrespective of the date of commencement of liquidation process. Any other interpretation would create uncertainty about the priority of payment of these components of liquidation cost over payment to stakeholders. Furthermore, the term "other liquidation cost" existed right from the inception of liquidation regulations and thus could not have meant to exclude certain components of l....
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..../ distributed is to be bifurcated in various slabs as per column 1. Only after that, liquidator has to divide the amount realised in a particular slab based on the tenure in which it was realised such as in first six months, next six months or thereafter. Out of the total amount pertaining to that slab, for the amount realised in first six months, % of fees will be as per column 2; for the amount realised in next six months, % of fees will be as per column 3; and for the amount realised thereafter, % of fees will be as per column 4. Illustration: Assume the liquidation commencement date is 01.11.2021. Further, the liquidation cost and period spent on compromise or arrangement are nil. The liquidator has realised Rs.10 crore on 01.01.2022 and another Rs.1 crore on 01.10.2023. Liquidator's fee - erroneously computed: Liquidator fee while interpreting "Amount of Realisation /Distribution" to mean value of assets realised during the first six months and then next six months period and so on, without considering the slab value of assets, computed as under: Particulars in first six months Fee in next six months Fee On the first 1 cro....
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.... handled in the past any liquidation assignment shall ensure that the fee charged by them under Regulation 4(2)(b) is in accordance with above clarifications and inform the same to the Board electronically on the website of IBBI. In cases, where excess liquidator's fee is returned and distributed on or before 31st October 2023 no disciplinary proceedings will be initiated on the ground that the excess fee was charged and has now been returned. 4. This Circular is being issued in exercise of the powers conferred under the provisions of section 196 of the Insolvency and Bankruptcy Code, 2016. Yours faithfully Sd/- Rajesh Tiwari General Manager Email: [email protected] xxi. It is the case of the Respondent that though Para 3 of the aforesaid circular provides that where excess fee is returned, no disciplinary proceeding will be initiated but there is a difference in cases where the excess fee is returned without being detected at all by the Board, and where the excess fee is returned after a draft inspection report, and where the excess fee is returned after receipt of a Show Cause Notice. In ....
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....on and does not warrant any interference. The DC found sufficient cause to impose a proportionate penalty for Petitioner's misconduct, in consonance with Section 220(2) of the Code read with Regulation 11 of the IP Regulations and Regulation 13 of the Inspection Regulations. 5. Heard the Counsels for the parties and perused the material on record. 6. The scope of judicial review over the decisions taken by quasi-judicial bodies or administrative bodies is well settled. Under Article 226 of the Constitution of India, the enquiry is limited to two questions: (i) whether the decision making process is just, fair and reasonable and in accordance with the rules laid down by the authorities for conducting the enquiry, (ii) whether the order is so perverse that no reasonable person would arrive at the decision taken by the authorities, i.e., it suffers from the vice of Wednesbury's Principles. 7. As stated in the foregoing paragraphs, against the Order dated 18.08.2022 passed by the Respondent, the Petitioner approached this Court by filing W.P.(C) 13317/2022, contending that copy of the final inspection report had not been supplied to him. Since the process ado....
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....e a show-cause notice in accordance with regulation 12 to the service provider or an associated person and in any other case, close the inspection or investigation, as the case may be." 12. It is clear from the perusal of Regulation 11(2) of the Inspection Regulations that the Respondent after consideration of the report, can issue a Show Cause Notice if it is of the prima facie opinion that sufficient cause exists to take action under Section 220 of the Code. 13. Taking into account the above-mentioned Regulations, this Court holds that the Respondent had followed the due process and has not committed any infirmity in the initiation of the disciplinary proceedings. 14. It is the case of the Petitioner that the Inspection Order was issued by Assistant General Manger instead of requisite/competent authority, i.e., the Executive Director, IBBI as per the Delegation Order. 15. As per clause 3(3) of the said Delegation Order when a Division does not have an Officer of a particular grade, the powers and functions delegated to him under this Order may be exercised by an Officer of the next immediate lower Grade, if so designated by the Chairperson. The relevant extract is the....
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....ority in consonance with the procedure laid down in the Delegation Order. Thus, we do not find any merit in the submission of the Petitioner that the Inspection Order was issued by AGM instead of Executive Director without requisite authority. Hence, this Court does not find merit with the plea of the Petitioner. No procedural irregularity was committed by the Respondent during the disciplinary proceedings. 18. After holding that there is no procedural irregularity in the Impugned Order, this Court now proceeds to consider the second aspect as to whether the Order of the DC is so perverse that it shocks the conscience of the Court, as to whether it is based on irrelevant considerations or, if there is a failure to take into account the material factors. 19. The Petitioner was first appointed as RP of Lanco and since the CIRP failed, the Petitioner was appointed as Liquidator in Lanco as well. 20. The Petitioner was the appointed liquidator for Lanco and the RP for SPPL. The Respondent has held the Petitioner for the following contraventions: a. In the matter of Lanco, the withdrawal of excess remuneration as Liquidator's fee. b. Petitioner engaged a relat....
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....ees) Percentage of fee on the amount realised / distributed in the first six months in the next six months thereafter Amount of Realisation (exclusive of liquidation costs) On the first 1 crore 5.00 3.75 1.88 On the next 9 crore 3.75 2.80 1.41 On the next 40 crore 2.50 1.88 0.94 On the next 50 crore 1.25 0.94 0.51 On further sums realized 0.25 0.19 0.10 Amount Distributed to Stakeholders On the first 1 crore 2.50 1.88 0.94 On the next 9 crore 1.88 1.40 0.71 On the next 40 crore 1.25 0.94 0.47 On the next 50 crore 0.63 0.48 0.25 On further sums distributed 0.13 0.10 0.05 (3) Where the fee is payable under clause (b) of sub-regulation (2), the liquidator shall been titled to receive half of the fee payable on realisation only after such realised amount is distributed. Clarification: Regulation 4 of these regulations, as it stood before the commencement of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations,2019 shall continue to be applicable in relation to the liquidation processes already c....
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.... for any third party; (ii) bailment contracts; (iii) all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund; (iv) other contractual arrangements which do not stipulate transfer of title but only use of the assets; and (v) such other assets as may be notified by the Central Government in consultation with any financial sector regulator; (b) assets in security collateral held by financial services providers and are subject to netting and set-off in multi-lateral trading or clearing transactions; (c) personal assets of any shareholder or partner of a corporate debtor as the case may be provided such assets are not held on account of avoidance transactions that may be avoided under this Chapter; (d) assets of any Indian or foreign subsidiary of the corporate debtor; or (e) any other assets as may be specified by the Board, including assets which could be subject to set-off on account of mutual dealings between the corporate debtor and any creditor." 25. Moreover, as per Section 208(2)(a) of the Code, an IP is bound to abide by the Code of Conduct and to take reaso....
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....titioner. In the present case, the Petitioner failed to substantiate how the erroneous interpretation of Regulation 4 of the Liquidation Regulations led to withdrawal of an excess fee. This fact is against the intent and spirit of the Code and its regulations. The Petitioner cannot be given the protection of Section 233 of the Code as the Petitioner has utterly failed to establish how his actions were done in good faith. 29. Further, the orders passed by the DC in similar cases which were relied upon by the Petitioner cannot be taken as precedent as they were passed in entirely different facts and circumstances. Therefore, we do not see any reason to interfere with the finding of the DC in the Impugned Order. 30. The Petitioner has also contended the finding of the DC in the Impugned Order upholding the charge in the SCN that the Petitioner had engaged DTTILLP on vague terms and conditions and paid unjustified fees without any documentation and quantification. The DC held that for carrying out his own duties, the Petitioner engaged assistance of DTTILLP which was not in the nature of appointment of professionals under Regulation 7(1) of the Liquidation Regulations. Instead, D....
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....ealized 0.25 0.19 0.13 0.10 Amount Distributed to Stakeholders On the first 1 crore 2.50 1.88 1.25 0.94 On the next 9 crore 1.88 1.40 0.94 0.71 On the next 40 crore 1.25 0.94 0.63 0.47 On the next 50 crore 0.63 0.48 0.34 0.25 On further sums distributed 0.13 0.10 0.06 0.05 (4) The liquidator shall be entitled to receive half of the fee payable on realization under sub-regulation (3) only after such realized amount is distributed." On the next 50 crore 0.63 0.48 0.25 On further sums distributed 0.13 0.10 0.05 [Clarification: For the purposes of clause (b), it is hereby clarified that where a liquidator realises any amount, but does not distribute the same, he shall be entitled to a fee corresponding to the amount realised by him. Where a liquidator distributes any amount, which is not realised by him, he shall be entitled to a fee corresponding to the amount distributed by him.] (3) Where the fee is payable under clause (b) of sub-regulation (2), the liquidator shall be entitled to receive half of the fee payable on realisation only after such ....
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....t to potential buyers With the help of a marketing professional, 11 Deliberation with stakeholders on the possible monetization of group entities for the benefit of stakeholders, whether as part of liquidation or outside liquidation process Regulation 31A of Liquidation Regulations. 12 Discussions with SAIL and various stakeholders and efforts towards realizing value from a coal mining contract of Corporate Debtor Regulation 31A of Liquidation Regulations. 13 Identifying EPC projects and potential receivables for recovery. report; Section 35(1)(b) to evaluate the assets and property of the corporate debtor in the manner as may be specified by the Board and prepare a report; 14 Bids for sale as a going concern at later stage Regulation 32 of Liquidation Regulations. 15 Filing of progress reports and compliances Regulation 15 of the Liquidation Regulations "The liquidator shall submit Progress Reports, in the format stipulated by the Board, to the Adjudicating Authority and the Board" 33. From the perusal of the above, it can be construed that the most of the activities contained by DTTILLP correspond to the role and functio....
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....; (i) to obtain any professional assistance from any person or appoint any professional, in discharge of his duties, obligations and responsibilities; (j) to invite and settle claims of creditors and claimants and distribute proceeds in accordance with the provisions of this Code; (k) to institute or defend any suit, prosecution or other legal proceedings, civil or criminal, in the name of on behalf of the corporate debtor; (l) to investigate the financial affairs of the corporate debtor to determine undervalued or preferential transactions; (m) to take all such actions, steps, or to sign, execute and verify any paper, deed, receipt document, application, petition, affidavit, bond or instrument and for such purpose to use the common seal, if any, as may be necessary for liquidation, distribution of assets and in discharge of his duties and obligations and functions as liquidator; (n) to apply to the Adjudicating Authority for such orders or directions as may be necessary for the liquidation of the corporate debtor and to report the progress of the liquidation process in a manner as may be specified by the Board; and (o)....
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....he Liquidator was not part of the SCN. 39. During the Disciplinary Proceeding, the Petitioner himself admitted to the scope of work of DTTILLP. The relevant portion of the Impugned Order is as follows: "3.3.20. Mr. Savan Godiawala submitted that the assistance required from DTTILLP, immediately upon the commencement of the liquidation in various processes, included the following: a. Claim verification; b. Planning and strategy for the auction of the Corporate Debtor, businesses, and assets; c. Preparation of liquidation estate and preparation for auction - data collation from various sites, review of assets and their categorization for first auction; d. Coordination and facilitation of valuation of assets; e. Preparation of reports such as preliminary report, asset memorandum, marketing documents, etc.; f. Interactions with the stakeholders, including through conduct of stakeholders' meetings; g. Preparation of process documents for auction of the Corporate Debtor, businesses, and assets; h. Appointment of auction agency; i. Discussion and planning the details of auction process with appoin....
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....ed timelines under CIRP regulations, the IBC Code, and the Limitation Act respectively. 46. The Petitioner in the 6th meeting of the CoC held on 22.10.2020 with respect to SPPL, himself admitted that the transaction audit is completed. The relevant portion of the meeting dated 22.10.2020 is provided hereunder: "Agenda 5: To update CoC on Corporate Insolvency Resolution Process ("CIRP") activities undertaken by the Resolution Professional ("RP") and to brief the CoC about the current state of operation and recent developments The Chair further in line with agenda briefed the CoC on activities undertaken by the RP/Authorised Representatives: * As discussed, in the fifth CoC meeting, final list of Prospective Resolution Applicants(PRAs) include: * Vedanta Limited * Manikaran Power Limited * Sherisha Technologies Private Limited * Prudent ARC Limited RP informed the CoC members that the PRAs were given access to the Virtual Data Roomand have devoted resources for their due diligence; however, none of the PRAs have submitted a Resolution Plan up to the due date. * The RP and his team are in continuous in....
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....the inferior tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substitute its own views for those of the inferior tribunal. The writ of certiorari can be issued if an error of law is apparent on the face of the record. A writ of certiorari, being a high prerogative writ, should not be issued on mere asking. 50. The second cardinal principle of exercise of extraordinary jurisdiction under Article 226 of the Constitution is that in a given case, even if some action or order challenged in the writ petition is found to be illegal and invalid, the High Court while exercising its extraordinary jurisdiction thereunder can refuse to upset it with a view to doing substantial justice between the parties. Article 226 of the Constitution grants an extraordinary remedy, which is essentially discretionary, although founded on legal injury. It is perfectly open for the writ court, exercising this flexible power to pass such orders as public interest dictates & equity projects. The legal formulations cannot be enforced divorced from the realities of the fact situation of the case. While administering law....
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....nal acts without jurisdiction or in excess of it, or fails to exercise it. 24.2. "Certiorari" will also be issued when the court or tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. 24.3. The court issuing a writ of "certiorari" acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the court will not review findings of fact reached by the inferior court or tribunal, even if they be erroneous." 53. This Court explained that a court which has jurisdiction over a subject-matter has jurisdiction to decide wrong as well as right, and when the legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy if a superior court were to rehear the case on the evidence and substitute its own finding in certiorari. 54. In Yakoob v. K.S.Radhakrishnan [Yakoob v. K.S . Radhakrishnan, 1963 SCC OnLine SC 24 : AIR 1964 SC 477],P.B. Gajendragadkar, C.J., speaking for the Constitution Bench, placed the matter beyond any ....
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.... inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ court. It is within these limits that the jurisdiction conferred on the High Courts under Article 226 to issue a writ of certiorari can be legitimately exercised...." 55. In Surya Dev Rai v. Ram Chander Rai [Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675], a Bench of two Judges held that the certiorari jurisdiction though available, should not be exercised as a matter of course. The High Court would be justified in refusing the writ of certiorari if no failure of justice had been occasioned. In exercising the certiorari jurisdiction, the procedure ordinarily followed by the High Court is to command the inferior court or tribunal to certify its record or proceedings to the High Court for its inspection so as to enable the High Court to determine, whether on the face of the record the inferior court has committed any of the errors as explained by this Court in Hari Vishnu Kamath v. Ahmad Ishaque [Hari Vishnu....
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....16) 8 SCC 622, the Apex Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, stated: "13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision. 53. The Apex Court in Silppi Constructions Contractors v. Union of India, (2020)16 SCC 489, has laid down that Courts should exercise a lot of restraint while exercising powers of judicial review in respect of matters pertaining to technical issues as the Courts lack the expertise to adjudicate upon technical issues. The relevant portion of the Judgment is reproduced as under: "19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising t....
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....Tata Motors Limited v. BEST held: "48. This Court being the guardian of fundamental rights Is duty-bound to Interfere when there Is arbitrariness, irrationality, mala fides, and bias However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review In contractual or commercial matters This Court Is normally loathe to Interfere In contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or Irrationality Is made out One must remember that today many public sector undertakings compete with the private industry The contracts entered Into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless Interference in commercial matters can cause. In contracts Involving technical issues the courts should be even more reluctant becau....
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.... the IBC. The Resolution Professional is therefore obliged to maintain the highest standard of professional ethics and even a single act of negligence, omission, or commission is sufficient for the Board to take action against the Resolution Professional/ Liquidator under Section 217-220 of the IBC after following the due procedure. The purpose of the IBBI is to look into the conduct of the Resolution Professional in the nature and manner of the performance of their duty. 57. The conduct of the Petitioner has been first scrutinized by the Investigating Authority which found substantial deficiencies in the conduct and performance of the Petitioner inasmuch the Petitioner failed to maximise the returns to the creditors by withdrawing excessive fee from the Liquidation estate of Lanco, hiring of external agency and allowing them huge fees for the tasks that were supposed to be done by the Petitioner himself, and delaying the filing of avoidance application in the case of SPPL. 58. The facts of the case does indicate a lack of devotion on the part of the Petitioner in not filing the avoidance application in the case of SPPL and engaging an entity in which he was a partner to perf....
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.... Hill 2. 2. Desired expertise, skills and qualifications: Personnel Name Skills Uday Bhansali · Relevant Regulations expertise Sumit Khanna · M&A advisory and process Nirmala Rajan expertise Manish Kumar Sharma Snehal Shah Operations and Management expertise Anusha Gupta · Steel Sector expertise Rashmi Malhotra · Project Management expertise To be supported by other relevant · Restructuring expertise resources from Corporate Finance practice Manish Kumar Sharma Snehal Shah 3. Name of the Engagement Partner and Manager: Engagement Partner - Sumit Khanna Engagement Director - Manish Kumar Sharma Engagement Manager - Snehal Shah 4. Description of Services : The Personnel will perform the Services as specified below : To assist the IP in taking control and managing the operations of Lanco Infratech Limited ("Corporate Debtor") and his other obligations as Liquidator of the Corporate Debtor under the Insolvency and Bankruptcy Code. DTTILLP has, pursuant to its review of the scope of the Services, represented and warranted to IP that the Personnel have adequate experience, capability and competency to perform the Services....