TaxTMI 
TaxTMI 
2025 (12) TMI 232
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....f the liquidator on account of supervening circumstances and grant/allow the regional remuneration as per the invoice and closed, which is in account with the provision of the regulation of 4(2) of the liquidation regulations and to pass any other or further order, as this court may deem fit and proper in the present Case and render justice." 2. However, the learned NCLT, after hearing both sides, dismissed the application holding thereof that (a) the application has been filed without mentioning the extensions that have been granted, (b) the Liquidator merely discharged his duty in disposing off the asset of the Corporate Debtor, (c) except for the time spent in litigation, nothing extraordinary in the liquidation process was carried out by the Liquidator, (d) for performing duty under Section 35 of the I&B Code, exclusion cannot be granted within the liquidation period and (e) the Liquidator has admitted that he has received his fee as per Regulation 4 of the liquidation regulation and the said fee has been paid in priority over other stakeholders and therefore the application is devoid of merits. 3. The brief facts of the case are that the Corporate Debtor, M/s. Rathna Sto....
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....ection 53 of I &B Code and that, but for these extraordinary circumstances, which extended the liquidation period, he could have completed the same in four months and would have been eligible to get the fees at a higher scale which was denied to him. The extraordinary circumstances, as per his claim, are (i) that the property was in the custody of the promoters during CIRP process and no action was taken by the RP and he took possession of the same, immediately after taking over as liquidator with the help of police after getting necessary orders from NCLT, (ii) that he took necessary action to rectify the defects in the title deeds of the property and the deviations in the construction of the building to the extent possible to make the property saleable, (iii) that the property was attached by the Income Tax department towards their claim of Rs.60 crore for which the erstwhile RP did not take any action and the Appellant only took necessary steps and vacated the Income Tax department attachment by getting orders from NCLT, which consumed nearly 6 months of time and which delayed the sale of the assets to realise its value. He further submits that the facts of the case will clea....
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.... further stated that the issue of remuneration is exhaustively provided under Regulation 4(2) of the liquidation process regulations, 2017 and the fee structure is specifically prescribed on a percentage basis linked to the amount realised and distributed from the liquidation estate and the said statutory prescription leaves no scope for any additional or equitable claim for remuneration beyond what has been expressly provided therein. He has further stated that the statutory duties of the Liquidator under Section 35 of I&B Code includes taking custody of assets, defending litigations, selling assets, and distribution of sale proceeds among the stakeholders, that the plea of the Appellant to exclude the time lost in litigation for taking position, rectifying defects and lifting of attachment made by Income Tax department is totally misconceived and that the conclusion of the learned NCLT that performance of statutory duties cannot be treated as extraordinary work for claiming exclusion is absolutely correct. He has further submitted that the ratio laid down in SIDBI Vs. Vijender Sharma is clearly distinguishable; The relevant para of the judgment is extracted hereunder: - ....
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....ommencement date: Provided that where the amount payable under this sub- regulation is not certain by the date the amount is payable under this sub-regulation, the secured creditor shall pay the amount, as estimated by the liquidator: Provided further that any difference between the amount payable under this sub-regulation and the amount paid under the first proviso shall be made good by the secured creditor or the liquidator, as the case may be, as soon as the amount payable under this sub-regulation is certain and so informed by the liquidator. (3) Where a secured creditor fails to comply with sub- regulation (2), the asset, which is subject to security interest, shall become part of the liquidation estate." 8. The respondent submits that in the aforesaid case, exclusion of time was granted only for the reason that the delay therein was caused due to misinterpretation of law by the secured creditor which compelled the Liquidator to file multiple applications before the adjudicating authority and that the said circumstances are peculiar to that case and cannot be widely applied for exclusion of time spent during the liquidation. He has further stated ....
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....to sell the same in parcels in such manner as may be specified; ^1[Provided that the liquidator shall not sell the immovable and movable property or actionable claims of the corporate debtor in liquidation to any person who is not eligible to be a resolution applicant]. (g) to draw, accept, make and endorse any negotiable instruments including bill of exchange, hundi or promissory note in the name and on behalf of the corporate debtor, with the same effect with respect to the liability as if such instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of its business; (h) to take out, in his official name, letter of administration to any deceased contributory and to do in his official name any other act necessary for obtaining payment of any money due and payable from a contributory or his estate which cannot be ordinarily done in the name of the corporate debtor, and in all such cases, the money due and payable shall, for the purpose of enabling the liquidator to take out the letter of administration or recover the money, be deemed to be due to the liquidator himself; (i) to obtain any pr....
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.... with the view of NCLT that the steps taken by the Liquidator are routine in nature and nothing out of ordinary while realising the assets in the liquidation estate. 12. Regarding whether NCLT has disregarded the ratio pronounced in the matter of SIDBI v. Vijendra Sharma, which has been relied upon by the Liquidator in his support, it is seen from the order that NCLT has not thought it fit to consider the pleading of the liquidator for exclusion of time on the ground that during the relevant time, only extension of time was sought, and the same has been granted and since it is the duty of the liquidator to take possession of the assets, conduct the case before the appropriate forum in order to different the CD, the time spent in such activities cannot be taken to be excluded from the liquidation period for the purpose of computing remuneration to be paid to the liquidator. Further, as pointed out by the Respondent, in the said case, the delay in proceeding was caused by the secured creditor itself, and that is not the case in the instant appeal. Further, it cannot be expected that the assets to be included in the liquidation estate are to be free from all defects and encumbrance....