TaxTMI 
TaxTMI 
2026 (8) TMI 1229
X X X X Extracts X X X X
X X X X Extracts X X X X
....liance. For the Respondent No.2 - UOI in WP/703/2023: Mr. Ashok R. Varma a/w. Mr. Vinit Jain. For the Respondent No.2 - UOI in WP/1560/2025: Mr. D. P. Singh. JUDGMENT (PER MANISH PITALE, J.) : 1. These petitions seek a declaration for striking down of Regulation 31A of The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 [IBBI Regulations] as being ultra vires the parent statute i.e. The Insolvency and Bankruptcy Code, 2016 (IBC). The petitioners also claim that the said Regulation introducing 'regulatory fee', is beyond the powers and functions of the Insolvency and Bankruptcy Board of India (Board) under Section 196 of the IBC and that the said Regulation is arbitrary, thereby violating Article 14 of the Constitution of India. 2. Writ Petition Nos. 703 of 2023 and 1560 of 2025 were filed in this Court, raising the aforesaid challenge. Writ Petition No.243 of 2024 was originally filed before the High Court of Madhya Pradesh, Bench at Indore and Writ Petition No.244 of 2024 was originally filed before the Delhi High Court. On 21.11.2023, the Supreme Court allowed Transfer Petition Nos. 2124 - 2126 of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tory fee by introduction of Regulation 31A in the IBBI Regulations, by way of amendment, is wholly arbitrary and hence, it violates Article 14 of the Constitution of India. 5. Apart from these, certain other issues were also raised on behalf of the petitioners, which will be adverted to during the course of dealing with the rival submissions. 6. In order to properly appreciate the rival submissions, it would be necessary to briefly refer to the chronology of events concerning these four writ petitions, leading to challenge to the validity of the aforesaid Regulation 31A of the IBBI Regulations. BRIEF CHRONOLOGY OF EVENTS Writ Petition No. 703 of 2023 (Hazel Mercantile Limited and others vs. IBBI and others): 7. The petitioners in this petition are the successful resolution applicants. On 15.01.2020, the National Company Law Tribunal (NCLT), Ahmedabad Bench, passed an order admitting Company Petition No.418 of 2018 filed by the IDBI Bank Limited, under Section 7 of the IBC, against the corporate debtor Reliance Naval and Engineering Limited. The CoC comprised of 22 financial creditors of the corporate debtor. On 05.05.2020, the NCLT, Ahmedabad Bench passed an order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e petitioner had originally filed this petition before the Delhi High Court and by the aforesaid order of the Supreme Court, the petition stood transferred to this Court. The petitioner is one of the buyers/allottees of a unit from the corporate debtor Som Resorts Private Limited. The CIRP pertaining to the said corporate debtor commenced as per order dated 02.08.2022 passed by the NCLT, New Delhi on an application filed under Section 7 of the IBC by the petitioner and other buyers. In the said case, the CoC approved the resolution plan submitted by the association of such home buyers i.e. Casa Italia Social Welfare Association in a meeting held on 08.04.2023. The said resolution plan was approved by majority. 13. The resolution professional submitted the said resolution plan before the NCLT for approval. At this point in time, the said notification dated 20.09.2022 was published by the Board, introducing regulatory fee as per Regulation 31A in the IBBI Regulations with effect from 01.10.2022. The petitioner is aggrieved by introduction of the regulatory fee, claiming the same to be arbitrary and illegal. The petitioner has also raised grounds pertaining to the said amendment in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cing regulatory fee, is beyond the regulation making power of the Board under Section 196 of the IBC. As per Section 196(1)(c) of the IBC, the Board can levy fee or other charges, essentially in the context of service providers. Introduction of certain words pertaining to the purposes of the IBC by way of amendment with effect from 06.06.2018, does not change the basic nature of power under the aforesaid provision. Since the Board provides service to and regulates only the insolvency professionals, insolvency professional agencies and information utilities, the Board could exercise power to levy regulatory fee only on the aforesaid entities. The petitioners, as successful resolution applicants, cannot be levied fee by recourse to the said power under Section 196(1)(c) of the IBC. During the course of CIRP, the Board does not regulate the petitioners as the successful resolution applicants, or for that matter, even the CoC, and it also does not provide any service to them, thereby demonstrating that Regulation 31A of the IBBI Regulations, deserves to be struck down. (b) In this context, it is necessary to peruse the definition of Insolvency Resolution Process Costs under Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndered unconstitutional. In support of the said proposition, reliance was placed on the judgment of the Supreme Court in the case of State of Rajasthan & Anr. vs. Rajasthan Chemists Association, (2006) 6 SCC 773. (f) It was emphasized that the Board does not, in any manner, regulate the proposed resolution applicants and the successful resolution applicants, during the process of CIRP. The acceptance of the proposal of the successful resolution applicant is dependent entirely on the negotiations between the CoC and the resolution applicant. Ultimately, it is the commercial wisdom of the CoC that prevails and even the adjudicatory body in the form of NCLT has a marginal role to play in the matter. On this basis, it was submitted that the regulatory fee introduced by the impugned Regulation 31A of the IBBI Regulations, is wholly unsustainable. In support of the said proposition, reliance was placed on the judgments of the Supreme Court in the case of Swiss Ribbons Private Limited & Anr. vs. Union of India & Ors., (2019) 4 SCC 17 and Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited & Anr., (2022) 2 SCC 401. (g) It was submitted t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cularly the successful resolution applicants like the petitioners. The amendment disturbs the sensitive financial equilibrium involved in a resolution plan, since the corporate debtor is to be revived as a going concern, in terms of the object of enactment of the IBC. Thus, the regulatory fee militates against the very object of the IBC. Hence, the writ petition deserves to be allowed and the impugned Regulation 31A of the IBBI Regulations deserves to be struck down as ultra vires the parent statue i.e. the IBC, apart from being unconstitutional and invalid, being in violation of Article 14 of the Constitution of India. 18. Mr. Kadam, learned Senior Counsel appearing for the petitioners in Writ Petition No. 1560 of 2025 made the following submissions : (a) It was submitted that the impugned Regulation 31A introduced in the IBBI Regulations militates against the very object of the IBC. By placing reliance on the judgments of the Supreme Court in the case of Chitra Sharma and others vs. Union of India and others, (2018) 18 SCC 575 and Swiss Ribbons Private Limited and another vs. Union of India and others (supra), it was submitted that under the IBC, primacy is given to the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ses of Hingir-Rampur Coal Co. Ltd. & Ors. vs. State of Orissa & Ors., (1961) 2 SCR 537, Raja Jagannath Baksh Singh vs. State of Uttar Pradesh & Anr., (1963) 1 SCR 220, Saurashtra Cement & Chemical Industries Ltd. & Anr. vs. Union of India & Ors., (2001) 1 SCC 91 and Indsil Hydro Power and Manganese Limited vs. State of Kerala & Ors., (2021) 10 SCC 165. (e) It was submitted that since the Board had failed to demonstrate as to what service it was providing during the CIRP and as to in what manner it was either supervising or assisting the resolution applicants and the CoC, not even a broad quid pro quo was made out in the present case, leading to the only conclusion that the impugned levy amounts to a tax and not fee. It was submitted that the Board cannot claim that it is providing an 'ecosystem' for the CIRP, without specifying as to what service is even broadly provided during the CIRP, to justify the impugned regulatory fee. It was submitted that the Board supervises and assists only the three entities i.e. resolution professional, insolvency professional agencies and information utilities, for which it is already charging fee. Therefore, the introduction of impugned Regulatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al amount of expenditure incurred by the Government in maintaining and functioning of the department. There has to be at least a broad corelation between the two. (i) The learned Senior Counsel for the petitioners further submitted that proviso to Regulation 31A of the IBBI Regulations renders imposition of regulatory fee retrospective in nature and on this ground, the said Regulation 31A of the IBBI Regulations or at least proviso thereto, deserves to be struck down. Much emphasis was placed on judgment of the Supreme Court in the case of Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited and another (supra). It was submitted that as per the law laid down in the said judgment, the resolution applicants cannot withdraw the resolution plan once the CoC approves the same on the basis of its commercial wisdom. It was submitted that once the CoC approves the resolution plan submitted by the resolution applicants, it is 'cast in stone' and there cannot be any modification at all. It was submitted that the role of the NCLT under Section 31 of the IBC is very limited and there is a real threat of the resolution application itself being rejected due t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of service provided by the SEBI directly to the entities it regulated i.e. stockbrokers and sub-brokers. In the present case, as emphasized hereinabove, it was submitted that the Board does not provide any service to the successful resolution applicants like the petitioners or even the CoC, during the CIRP. In this context, reliance was placed on the judgment of the Supreme Court in the case of Calcutta Municipal Corporation & Ors. vs. Shrey Mercantile (P) Ltd. & Ors., (2005) 4 SCC 245. On this basis, it was submitted that the writ petition ought to be allowed and the impugned Regulation deserves to be struck down. 19. Ms. Khushboo D. Rohra, learned counsel appeared for the petitioner in Writ Petition No. 243 of 2024 and Ms. Meghna Talwar, learned counsel appeared for the petitioner in Writ Petition No. 244 of 2024. They supported and adopted the contentions raised by the learned Senior Counsel for the petitioners in Writ Petition No. 703 of 2023 and Writ Petition No. 1560 of 2025. On that basis, it was submitted that the said writ petitions also deserved to be allowed and the impugned Regulation deserved to be struck down. 20. On the other hand, Mr. Khambata, learned senio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....also placed on judgement of the Supreme Court in the case of State Bank of India and others Vs. Consortium of Murari Lal Jalan and Florian Fritsch and another, (2025) 4 SCC 354, wherein the said guidelines for CoCs were approved. (d) By placing reliance on judgement of the Supreme Court in the case of Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited and another (supra), it was submitted that the Board is required to formulate regulations dynamically. Reliance was also placed on judgements of Delhi and Madras High Courts in the cases of Insolvency and Bankruptcy Board of India Vs. State Bank of India, 2022 SCC OnLine Del. 4200 and CA Venkata Siva Kumar Vs. Insolvency and Bankruptcy Board of India, 2020 SCC OnLine Mad. 22581, on the significant role performed by the Board and its responsibilities for carrying out the functions of various entities and stakeholders under the IBC, particularly during CIRP. On this basis, it was submitted that the attempt on the part of the petitioners to limit the role of the Board only qua the aforesaid three entities, was fallacious and the same ought not to be accepted. (e) A strong objection wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is clearly a residuary clause. In this regard, reliance was also placed on judgements of the Supreme Court in the cases of Grasim Industries Limited Vs. Collector of Customs, (2002) 4 SCC 297 and Rajasthan State Electricity Board Vs. Mohan Lal, 1967 SCC OnLine SC 18. (g) It was further emphasized that even if it was assumed for the sake of argument that the principle of ejusdem generis applied, following the dictum laid down by the Supreme Court in the case of Grasim Industries Limited vs. Collector of Stamps (supra) when specific subjects of enumeration belong both to a broad-based genus and a narrower genus, there is no principle that the general words should be confined to the narrower genus. In this regard, reference was also made to Section 222 pertaining to the Board's Funds, particularly clauses (b) and (c) of Section 222(2) of the IBC, specifying expenses concerning objects and purposes authorized by the IBC. (h) In answer to the contention raised on behalf of the petitioners that imposition of regulatory fee under the impugned Regulation 31A of the IBBI Regulations was a colourable exercise of power, reliance was placed on judgements of the Supreme Court....
X X X X Extracts X X X X
X X X X Extracts X X X X
....026 SC OnLine SC 972. (j) The learned senior counsel for the respondent Board made specific submissions with regard to the meaning and interpretation of the word 'regulate' as the impugned Regulation imposes a regulatory fee, which is treated as part of the CIRP cost. It was submitted that in terms of the settled position of law, when the subject fee is regulatory in nature, the element of quid pro quo is not strictly necessary and when the fee is charged for regulation, specific service being rendered need not be demonstrated. In this regard reliance was placed on the judgement of the Constitution Bench of the Supreme Court in the cases of Corporation of Calcutta Vs. Liberty Cinema, AIR 1965 SC 1107 and the aforesaid judgement in the case of Mineral Area Development Authority and another vs. Steel Authority of India and another (supra). Much emphasis was placed on the judgement of the Supreme Court in the case of BSE Broker's Forum vs. SEBI (supra), wherein it was held that where the fee is regulatory in nature then the requirement of quid pro quo recedes in the background and quid pro quo is not a condition precedent for levying a regulatory fee. Reliance was also placed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lly dependent upon the government for its finances and the manner in which it is on its way to achieve financial self-sufficiency in the light of the amounts generated by levy of the regulatory fee. (m) As regards the attack launched on behalf of the petitioners on the proviso to impugned Regulation 31A of the IBBI Regulations, it was submitted that the petitioners were wrongly reading the proviso to claim that it amounted to retrospective applicability of the regulatory fee. It was submitted that a proper reading of the proviso would show that it is clearly prospective, with effect from 01.10.2022. In this context, it was submitted that the petitioners were wrongly reading the provisions of the IBC, particularly Section 31 thereof. If the contentions raised on behalf of the petitioners with regard to the role of the NCLT as an adjudicatory authority under Section 31 of the IBC are to be accepted, it would reduce the NCLT to being a body merely performing ministerial acts. The whole authority of the NCLT as an adjudicatory authority would stand jeopardized. It was submitted that the judgement of the Supreme Court in the case of Ebix Singapore Private Limited vs. Committee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....udicatory authority also heavily relied upon the respondent Board for a smooth, transparent and accelerated conduct of CIRP. It was submitted that the petitioner (Hazel Mercantile Limited) surprisingly claimed that it had nothing to do with the CIRP and that the respondent Board did not provide any service to it. The said claim is obviously based on a complete misreading and misunderstanding of the entire scheme of the IBC. (q) The learned senior counsel for the respondent Board proceeded to deal with and distinguish various judgements relied upon by the learned senior counsel appearing for the petitioners. He submitted that the position of law, if properly understood, inures to the benefit of the respondent Board and that therefore, all the petitions deserve to be dismissed. CONSIDERATION & ANALYSIS 21. Having considered the rival submissions and in the light of the material brought to the notice of this Court, including a number of judgements, the findings thereon are being rendered under various headings, so that the contentions put forth by the parties are effectively dealt with under each heading. Role of Insolvency and Bankruptcy Board: 22. The Insolvency....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erused, it becomes evident that reading the role of the Board as a regulator only for the aforementioned three entities, would not be in consonance with the scheme of the IBC. Section 188 of the IBC provides for establishment and incorporation of the Board, while Sections 189 to 195 thereof, provide the details of constitution of the Board, powers of the Chairperson of the Board and other such aspects. Section 196 of the IBC provides for the powers and functions of the Board. Amongst other functions, the Board crucially performs quasi-legislative functions and these have to be appreciated along with the clauses of Section 240 of the IBC. But before referring to the aforementioned provisions, it would be appropriate to also consider as to the executive functions performed by the Board under the IBC. The Board, under Section 196(1)(a) maintains a register of service providers and it has the power to renew, withdraw, suspend or cancel such registrations. The Board also performs quasi-judicial functions in the form of regulating the functioning of insolvency professionals, insolvency professional agencies and information utilities. It has the power to appoint a disciplinary committee, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....trations; (aa) promote the development of, and regulate, the working and practices of, insolvency professionals, insolvency professional agencies and information utilities and other institutions, in furtherance of the purposes of this Code; (b) specify the minimum eligibility requirements for registration of insolvency professional agencies, insolvency professionals and information utilities; (c) levy fee or other charges for carrying out the purposes of this Code, including fee for registration and renewal] of insolvency professional agencies, insolvency professionals and information utilities; (d) specify by regulations standards for the functioning of insolvency professional agencies, insolvency professionals and information utilities; (e) lay down by regulations the minimum curriculum for the examination of the insolvency professionals for their enrolment as members of the insolvency professional agencies; (f) 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....el bye-laws to be to adopted by insolvency professional agencies which may provide for- (a) the minimum standards of professional competence of the members of insolvency professional agencies; (b) the standards for professional and ethical conduct of the members of insolvency professional agencies; (c) requirements for enrolment of persons as members of insolvency professional agencies which shall be non-discriminatory; Explanation.-For the purposes of this clause, the term "non-discriminatory" means lack of discrimination on the grounds of religion, caste, gender or place of birth and such other grounds as may be specified; (d) the manner of granting membership; (e) setting up of a governing board for internal governance and management of insolvency professional agency in accordance with the regulations specified by the Board; (f) the information required to be submitted by members including the form and the time for submitting such information; (g) the specific classes of persons to whom services shall be provided at concessional rates or for no remuneration by members; (h) the grounds on which penal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the meetings of the committee of creditors under sub-section (8) of section 24; (s) the manner of appointing accountants, lawyers and other advisors under clause (d) of sub-section (2) of section 25; xxx xxx xxx (u) the form and the manner in which an information memorandum shall be prepared by the resolution professional sub-section (1) of section 29; (v) the other matter pertaining to the corporate debtor under the Explanation to sub-section (2) of section 29; (w) the manner of making payment of insolvency resolution process costs under clause (a), the manner of payment of debts of operational creditors under clause (b), the manner of payment of debts of financial creditors who do not vote in favour of the resolution plan under clause (ba), the conditions and manner for constitution of a committee under clause (d) and the other requirements to which a resolution plan shall conform to under clause (f) of sub-section (2) of section 30; (wa) other requirements under sub-section (4) of section 30; (wb) the form, manner and the conditions under the second proviso to sub-section (1) of section 31; (wc) the....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the impugned Regulation 31A of the IBBI Regulations ought to be struck down, deserves to be rejected. 29. As a matter of fact, the aforesaid contention of the petitioners goes against the observations made by the Courts in various cases with regard to the importance attached to the role of the Board, as a regulator, particularly during CIRP. 30. The Delhi High Court, in the case of Kunwar Sachdev vs. IDBI Bank (supra), had an occasion to consider the role of the Board in the context of CIRP. After referring to the relevant provisions of the IBC, the Delhi High Court observed in the said judgement that the Board could frame and finalize the code of conduct/guidelines for effective functioning of the CoC. In the said judgement, the Delhi High Court took into consideration Section 196 of the IBC and reached a conclusion that although the sanctity of commercial wisdom of the CoC was indeed protected under the IBC, but for an effective working of the CoC and for satisfying the objectives of the IBC, a proper set of guidelines and code of conduct was necessary. In the light of the pivotal role of the Board as a regulator under the IBC, the Delhi High Court thought it fit to issue....
X X X X Extracts X X X X
X X X X Extracts X X X X
....kruptcy Board of India (supra), also referred to the provisions of the IBC, as also the BLRC report and having taken note of the relevant provisions of the IBC, observed as follows: "13. In this case, it is evident that Parliament enacted the IBC by drawing on the BLRC Report and the bill prepared by the BLRC. In both the FSLRC and BLRC Reports, it was recommended that the regulator should be self-sufficient at least with regard to operational expenses by collecting fees to finance its activities. When viewed in this context, it is clear that sections 196(1)(c) and 207 of the IBC and the IP Regulations are intended to fulfil the object and purpose of the IBC as regards the functioning of the IBBI. On examining the IBC, it is also clear that the IBBI plays a significant role as the principal regulator as regards insolvency and liquidation. Even with specific reference to IPs, as pointed out by the learned ASGI, under section 16(3) and (4) of the IBC, the IBBI is entrusted with the responsibility of recommending a RP if the operational creditor concerned fails to do so. In addition, by way of illustration, under section 22(4) and (5) and section 27(4) and (5), respectively, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heme of the IBC in the light of the above-quoted provisions, as also the findings and observations given by various Courts, while dealing with the regulatory role performed by the Board under the provisions of the IBC. 38. This Court is of the opinion that the Board indeed performs executive, quasi-judicial and quasi-legislative functions under the provisions of the IBC and its role is highlighted in various provisions, including those which mandate the adjudicatory authority at various stages to seek the opinion of the Board as a regulator. We are of the opinion that the broad regulatory role of the Board under the provisions of the IBC, needs to be taken into consideration, while dealing with other aspects of the matter that arise for consideration in these petitions. Whether the regulatory fee is with authority of law? 39. The petitioners, particularly Hazel Mercantile Limited, has contended before this Court that the impugned Regulation 31A introduced by way of amendment with effect from 01.10.2022 in the IBBI Regulations, is without authority of law, as it is beyond the powers and functions of the Board under Section 196 of the IBC. In order to consider the said conte....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is significant to note that by the very amendment which introduced Regulation 31A of the IBBI Regulations, clause (ba) was also introduced in Regulation 31, which pertains to insolvency resolution process costs. This, in turn, has to be read with Section 5(13), which defines insolvency resolution process costs, wherein clause (e) states that such costs would mean any other costs that may be specified by the Board. A conjoint reading of Sections 5(13)(e), 196(1)(c) and 240(2)(d) of the IBC and Regulation 31 of the IBBI Regulations, clearly shows that the Board, as a regulator, had the power under the legislative scheme of the IBC to impose regulatory fee by way of Regulation 31A introduced in the IBBI Regulations by the aforesaid amendment. Therefore, the petitioners cannot contend that introduction of regulatory fee by way of amending the IBBI Regulations and inserting Regulation 31A therein, was without the authority of law. We find that the introduction of Regulation 31A in the IBBI Regulations was well within the quasi-legislative powers conferred on the Board under the aforesaid provisions of the IBC. Is Regulation 31A ultra vires the provisions of the IBC? 42. The petit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (e) any other costs as may be specified by the Board;" 45. Regulation 31 and 31A of the IBBI Regulations read as follows: "31. Insolvency resolution process costs. "Insolvency resolution process costs" under Section 5(13)(e) shall mean- (a) amounts due to suppliers of essential goods and services under Regulation 32; (aa) fee payable to authorised representative under sub-regulation (8) of regulation 16A; (ab) out of pocket expenses of authorised representative for discharge of his functions under section 25A; (ac) fee payable to facilitator under clause (c) of sub-regulation (1) of regulation 16C. (b) amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under section 14(1)(d); (ba) fee payable to the Board under regulation 31A; (c) expenses incurred on or by the interim resolution professional to the extent ratified under Regulation 33; (d) expenses incurred on or by the resolution professional fixed under Regulation 34; and (e) other costs directly relating to the corporate insolvency resolution process and approved by the c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....troduced by Regulation 31A in the IBBI Regulations by way of amendment with effect from 01.10.2022. In this backdrop, the assertion of the petitioners, while invoking the principle of ejusdem generis in the context of clause (e) to Section 5(13) of the IBC, has to be considered. 49. The law relating to the concept of ejusdem generis is by now well-settled and it has been referred to and relied upon by the Courts as an interpretative tool on many occasions. In the case of Rajasthan State Electricity Board, Jaipur vs. Mohan Lal and others (supra) and Pioneer Urban Land and Infrastructure Limited vs. Union of India and others (supra), the Supreme Court had an occasion to deal with the said concept. The Constitution Bench of the Supreme Court, in the case of Rajasthan State Electricity Board, Jaipur vs. Mohan Lal and others (supra), observed as follows: "4. In our opinion, the High Courts fell into an error in applying the principle of ejusdem generis when interpreting the expression 'other authorities' in Article 12 of the Constitution, as they overlooked the basic principle of interpretation that, to invoke the application of ejusdem generis rule, there must be a distinct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lar words pertaining to a class, category or genus are followed by general words. In such a case the general words are construed as limited to things of the same kind as those specified. The rule reflects an attempt to reconcile incompatibility between the specific and general words in view of the other rules of interpretation that all words in a statute are given effect if possible, that a statute is to be construed as a whole and that no words in a statute are presumed to be superfluous. The rule applies only when (1) the statute enumerates the specific words, (2) the subjects of enumeration constitute a class or category, (3) that class or category is not exhausted by the enumeration, (4) the general terms follow the enumeration, and (5) there is no indication of a different legislative intent. If the subjects of enumeration belong to a broad-based genus, as also to a narrower genus there is no principle that the general words should be confined to the narrower genus. In interpreting Section 30 of the United Towns Electrical Company Act, 1902 which reads 'the company shall be liable for water rates on all lands and buildings owned by it in the aforesaid towns, but otherwise the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c entertainment' should be licensed, the question arose whether a 'funfair' for which no fee was charged for admission was within the Act. It was held to be so, and that the ejusdem generis rule did not apply to confine the words 'other places' to places of the same kind as theatres. So the insertion of such words as 'or things of whatever description' would exclude the rule. (Attorney-General v. Leicester Corpn. [(1910) 2 Ch 359 : (1908-10) All ER Rep Ext 1002 : 103 LT 14] ) In N.A.L.G.O. v. Bolton Corpn. [1943 AC 166 : (1942) 2 All ER 425 (HL)] Lord Simon, L.C. referred to a definition of 'workman' as any person who has entered into a works under a contract with an employer whether the contract be by way of manual labour, clerical work 'or otherwise' and said:'The use of the words "or otherwise" does not bring into play the ejusdem generis principle : for "manual labour" and "clerical work" do not belong to a single limited genus' and Lord Wright in the same case said:'The ejusdem generis rule is often useful or convenient, but it is merely a rule of construction, not a rule of law. In the present case it is entirely inapt. It presupposes a "genus" but here the only "genus" is "a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....291-93, paras 70-74) ''70. The other aspect that is being highlighted in the context of Article 19(2) is that defamation even if conceived of to include a criminal offence, it must have the potentiality to "incite to cause an offence". To elaborate, the submission is the words "incite to cause an offence" should be read to give attributes and characteristics of criminality to the word "defamation". It must have the potentiality to lead to breach of peace and public order. It has been urged that the intention of clause (2) of Article 19 is to include a public law remedy in respect of a grievance that has a collective impact but not as an actionable claim under the common law by an individual and, therefore, the word "defamation" has to be understood in that context, as the associate words are "incitement to an offence" would so warrant. Mr Rao, learned Senior Counsel, astutely canvassed that unless the word "defamation" is understood in this manner applying the principle of noscitur a sociis, the cherished and natural right of freedom of speech and expression which has been recognised under Article 19(1)(a) would be absolutely at peril. Mr Narasimha, learned ASG would conte....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the setting. In other words, while the setting of the words may sometimes be necessary for the interpretation of the words of the statute, but that has not been ruled by this Court to be the only and the surest method of interpretation.' 73. The Constitution Bench, in Godfrey Phillips (India) Ltd. v. State of U.P. (2005) 2 SCC 515, while expressing its opinion on the aforesaid rule of construction, opined : (SCC pp. 550 & 551, paras 81 & 83) '81. We are aware that the maxim of noscitur a sociis may be a treacherous one unless the "societas" to which the "socii" belong, are known. The risk may be present when there is no other factor except contiguity to suggest the "societas". But where there is, as here, a term of wide denotation which is not free from ambiguity, the addition of the words such as "including" is sufficiently indicative of the societas. As we have said, the word "includes" in the present context indicates a commonality or shared features or attributes of the including word with the included. *** 83. Hence on an application of general principles of interpretation, we would hold that the word "luxuries" in Entry 62 of List II means....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en deliberately used in a residuary provision, to make the scope of the definition of "financial debt" subsume matters which are not found in the other sub-clauses of Section 5(8). This contention must also, therefore, be rejected." 52. The exposition of the principles of ejusdem generis and noscitor a sociis by the Supreme Court in the aforementioned judgements and followed thereafter in various other judgements, makes it sufficiently clear that for invoking the said principles, the general words used in a provision of law have to be preceded by words that form an identifiable class or genus. It is also laid down that if the preceding words do not form such a class or genus, the general words used in the later portion of the provision cannot be limited to the preceding words, apart from holding that the principle of ejusdem generis does not apply to a residuary clause. The position of law as enumerated in the said judgements also clarifies that if the subjects specified in the preceding words belong to a broad-based genus as well as a narrow genus, the general words should not be confined to the narrower genus. This is most crucial for the argument of principle of ejusdem gener....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsolvency, CIRP and approved by the Committee. Thus, it cannot be said that the Board could not impose the impugned regulatory fee as part of the insolvency resolution process costs, on the ground that the Board can levy a fee or charge only in the nature of fee identified in clauses (a) to (d) of Section 5(13) of the IBC. 57. We also find that the petitioners cannot rely upon the judgement of the Supreme Court in the case of Nirma Industries Limited & Anr. vs. Securities and Exchange Board of India (supra). A perusal of the said judgement shows that the Supreme Court was considering such a purported residuary clause in a Regulation, which was itself couched in negative terms. It was found that the concerned Regulation itself indicated a class of circumstances, wherein a public offer once made in the context of Regulations framed by the Securities and Exchange Board of India, could not be withdrawn. On facts, it was found that the clauses preceding the said general clause indicated the circumstances, wherein such a public offer could not be withdrawn and that such circumstances indeed formed a specific class or genus. In such facts, the Supreme Court held that the concerned clau....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Hon'ble Judges), in the case of Commissioner, Hindu Religious Endowments, Madras vs. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (supra), wherein the distinction between tax and fee was deliberated upon. The Supreme Court in the said judgment held that the distinction between a tax and a fee primarily lies in the fact that tax is levied as part of the common burden, while a fee is a payment for special benefit or privilege. The relevant portion of the said judgment, upon which the petitioners heavily relied, reads as follows : "46. As regards the distinction between a tax and a fee, it is argued in the first place on behalf of the respondent that a fee is something voluntary which a person has got to pay if he wants certain services from the Government; but there is no obligation on his part to seek such services and if he does not want the services, he can avoid the obligation. The example given is of a licence fee. If a man wants a licence that is entirely his own choice and then only he has to pay the fees, but not otherwise. We think that a careful examination will reveal that the element of compulsion or coerciveness is present in all kinds of imposition, tho....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... between the fee collected and the service intended to be rendered. It was held that where the legislature attempted to impose a tax under the guise of levying a fee, it could be colourable exercise of power and that the Courts would be well within their rights to scrutinize the scheme of the levy very carefully, to examine whether there was a correlation between the service and the levy. 63. In the case of Sreenivasa General Traders vs. State of AP (supra), a two Judge Bench of the Supreme Court considered the development of law as regards the distinction between tax and fee. It was found that the traditional view, that there must be actual quid pro quo for a fee, had undergone a sea change in subsequent decisions. In that context, the Supreme Court in the said judgment made the following observations : "31. The traditional view that there must be actual quid pro quo for a fee has undergone a sea change in the subsequent decisions. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary moti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the authority to each individual who obtains the benefit of the service. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence are taken to the consolidated fund of the State and not separately appropriated towards the expenditure for rendering the service is not by itself decisive. Presumably, the attention of the Court in the Shirur Mutt case [(1980) 1 SCC 416 : AIR 1980 SC 1008 : (1979) 3 SCR 1217] was not drawn to Article 266 of the Constitution. The Constitution nowhere contemplates it to be an essential element of fee that it should be credited to a separate fund and not to the consolidated fund. It is also increasingly realised that the element of quid pro quo in the strict sense is not always a sine qua non for a fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax: Constitutional Law of India by H.M. Seervai, Vol. 2, 2nd Edn., p. 1252, paras 22, 39." 64. In the case of B.S.E. Brokers' Forum, Bombay and others vs. Securities and Exchange Board of India and others (supra), upon which even the petitioners placed reliance, a three Judge Bench of the S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gulatory measure since the collection of such funds from such category of people will have to be monitored strictly, and it also held that the Act and the Rules which operate with such objectives, if charge enhanced fee, such enhancement is justified in law as amounting to sufficient quid pro quo. 34. In Krishi Upaj Mandi Samiti v. Orient Paper & Industries Ltd. [(1995) 1 SCC 655] rejecting the contention of the respondent therein, this Court held that the machinery created under the said Act is meant to facilitate and benefit all the buyers and sellers of all the agricultural produce within the market area and it cannot be said that the respondent Mills are neither directly nor indirectly a beneficiary of the said machinery. 35. In the case of Secy. to Govt. of Madras v. P.R. Sriramulu [(1996) 1 SCC 345] testing the validity of the Court Fee Act involved therein, this Court negatived the contention that the expenses incurred by the administration of justice in criminal courts should not be treated as sufficient quid pro quo for the levy of court fee in civil cases. It held that such levy should not be examined so minutely or be weighed in golden scales to discern....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fee is concerned, the service to be rendered is not a condition precedent and the same does not lose the character of a fee provided the fee so charged is not excessive. It is also not necessary that the services to be rendered by the collecting authority should be confined to the contributories alone. As held in Sirsilk Ltd. [1989 Supp (1) SCC 168 : 1989 SCC (Tax) 219 : AIR 1989 SC 317] if the levy is for the benefit of the entire industry, there is sufficient quid pro quo between the levy recovered and services rendered to the industry as a whole. If we apply the test as laid down by this Court in the abovesaid judgments to the facts of the case in hand, it can be seen that the statute under Section 11 of the Act requires the Board to undertake various activities to regulate the business of the securities market which requires constant and continuing supervision including investigation and instituting legal proceedings against the offending traders, wherever necessary. Such activities are clearly regulatory activities and the Board is empowered under Section 11(2)(k) to charge the required fee for the said purpose, and once it is held that the fee levied is also regulatory in nat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... collected is enough to uphold the validity of the fee charged. The levy of the impugned cess can equally be upheld by reference to Entry 66 read with Entry 5 of List II." 68. Thus, it becomes evident that with passage of time, in the context of levy of a fee, even availability of indirect benefit and a general nexus between the persons bearing the burden of levy of fee and the services rendered out of such fee, was found to be enough to uphold the validity of such a fee. This is crucial in the present case, for the reason that the petitioners on the one hand claim that the respondent Board provides no service at all to them, as they are successful resolution applicants and they are not regulated by the Board, while on the other hand, the respondent Board claims that it provides wide ranging services throughout CIRP to all the stakeholders, including the petitioners, who are successful resolution applicants. In this context, the rival parties relied upon the provisions of the IBC and the Regulations framed thereunder. An analysis of the same would be necessary to reach a conclusion in the matter. 69. But, before undertaking the aforesaid exercise, it would be appropriate to f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nough to sustain the levy as a fee and not classify it as tax. 73. In the case of Jalkal Vibhag Nagar Nigam and others vs. Pradeshiya Industrial and Investment Corporation and another (supra), a three Judge Bench of the Supreme Court, while considering a levy imposed by a municipal body while deliberating upon the nature of the levy, observed as follows : "61. The distinction between a tax and fee has substantially been effaced in the development of our constitutional jurisprudence. At one time, it was possible for courts to assume that there is a distinction between a tax and a fee : a tax being in the nature of a compulsory exaction while a fee is for a service rendered. This differentiation, based on the element of a quid pro quo in the case of a fee and its absence in the case of a tax, has gradually, yet steadily, been obliterated to the point where it lacks any practical or constitutional significance. For one thing, the payment of a charge or a fee may not be truly voluntary and the charge may be imposed simply on a class to whom the service is made available. For another, the service may not be provided directly to a person as distinguished from a general servic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... towards the expenditure for rendering the service is not by itself decisive. That is because the Constitution did not contemplate it to be an essential element of a fee that it should be credited to a separate fund and not to the consolidated fund. It is also increasingly realised that the element of quid pro quo stricto senso is not always a sine qua non of a fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax. We may, in this connection, refer with profit to the observations of Seervai in his Constitutional Law, to the effect : [H.M. Seervai, Constitutional Law of India, 2nd Edn., Vol. 2, p. 1252, paras 22 & 39.] 'It is submitted that as recognised by Mukherjea, J. himself, the fact that the collections are not merged in the consolidated fund, is not conclusive, though that fact may enable a court to say that very important feature of a fee was present. But the attention of the Supreme Court does not appear to have been called to Article 266 which requires that all revenues of the Union of India and the States must go into their respective consolidated funds and all other public moneys must go into the respective public ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ments, including judgements rendered by Constitution Benches, on the aspect of distinction between tax and fee. Thereupon, in the aforesaid judgment, the following observations were made : "83. In three Judges Bench decision in the case of Sreenivasa General Traders v. State of Andhra Pradesh14 it was held that there is no generic difference between tax and a fee as the traditional law distinguishing tax from fee has undergone a sea change. The distinction between a fee and tax lies primarily between the fact that tax is a part of common burden while a fee is for payment of a specific benefit or privilege. In regard to the fee, there is, and must always be, direct relation between fee collected and the services intended to be rendered. In determining whether a levy is a fee, the true test must be whether its primary and essential purpose is to render specific services. The benefit, if any, derived by the State out of such fee collected is of no consequences. The power of any legislature to levy a fee is conditioned by the fact that it must "by and large" be a quid pro quo for the services rendered and that there should be a "reasonable relationship" between the levy of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... charged from certain entities. 77. Applying the said position of law to the present case, it would be enough for the respondent Board to show generalized and broad-based quid pro quo services provided to the stakeholders in the process of the CIRP under the IBC. It is relevant to note that the stakeholders in CIRP include the members of CoC as well as resolution applicants like the petitioners. In fact, this Court finds the contention raised on behalf of the petitioner-Hazel Mercantile Limited to the effect that it had nothing to do with CIRP, as a completely untenable submission, worthy of being rejected outright. We fail to understand how the petitioner-Hazel Mercantile Limited can claim that it has nothing to do with CIRP when the whole process of CIRP is tuned and dynamically operates with the active participation of all stakeholders, particularly the CoC and the resolution applicants. 78. The emphasis on the part of the petitioners, as noted in the earlier part of this judgment, was on the manner in which the respondent Board regulates the three service providers i.e. insolvency professionals, insolvency professional agencies and service utility. The petitioners claimed....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the respondent Board and that it therefore provides service to the process of CIRP in that context. 82. Clause (nc) of Section 240(2) of the IBC provides for the manner of voting and determining the vote share in respect of financial debts under Section 21(7) of the IBC. Section 21(7) of the IBC specifically empowers the respondent Board to specify as to the manner in which the voting and determining the voting share of the CoC is to be undertaken. The aforesaid action of the CoC is at the very heart of the process of CIRP, therefore, indicating the role of the respondent Board in that context. Clause (o) of Section 240(2) of the IBC gives power to the Board to frame regulations with regard to the persons who shall comprise the CoC, the functions to be exercised by the CoC and the manner in which functions shall be exercised under proviso to Section 21(8) of the IBC. The said proviso pertains to a situation where a corporate debtor does not have any financial creditors and when the CoC has to be constituted and comprise of such persons, as may be specified by the Board. This is another crucial function performed by the respondent Board during CIRP. 83. Clause (oa) of Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... process of liquidation. The role of the respondent Board is further widened by the introduction of the concept of cross-border insolvency under Section 240C of the IBC. This includes the process for recognition of proceedings, judicial co-operation, assistance and co-ordination in such cases of cross-border insolvency for classes of debtors or corporate debtors, involving various countries and territories outside India. A perusal of the IBBI Regulations indeed shows that Board has framed Regulations for crucial stages of CIRP, which include Chapter V for CoC, Chapter VI for meetings of the Committee, Chapter VII for voting by the Committee, Chapter VIII for conduct of CIRP, Chapter IX for insolvency resolution process costs and Chapter X for resolution plan. 86. Hence, the role of the respondent Board sought to be read in a narrow and constricted manner by the petitioners in order to claim that there is absolutely no quid pro quo insofar as they are concerned, is found to be unsustainable. The whole process of preparation of the resolution plan and submission of the same before the CoC, approval thereof by requisite majority of the members of the CoC and then the finalized plan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that it is in reality a tax masquerading as a fee, deserves to be rejected. Accordingly, it is rejected. Is the impugned regulatory fee bad, as it is excessive in nature? 89. The petitioners have also challenged the impugned regulatory fee on the ground that it is excessive and expropriatory in nature, as a consequence of which in reality it has become a compulsory imposition in the form of a tax. In this context, the petitioners have relied upon some judgments and reference is also made to the audited statement of account of the respondent Board. 90. The petitioners have relied upon the judgments of the Supreme Court in the cases of P. M. Ashwathanarayana Setty and others vs. State of Karnataka and others (supra); A. P. Paper Mills Ltd. vs. Govt. of A.P. and another, (2020) 8 SCC 167; State of U.P. and others vs. VAM Organic Chemicals Ltd. and others (supra); State of H.P and others vs. Shivalik Agro Poly Products and others (supra) and the judgment of this Court in case of Vidarbha Chamber of Commerce and Industries, Akola vs. Commissioner, Municipal Corporate of Akola City and another (supra). The thrust of the contention raised on behalf of the petitioners by relyin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the audited annual accounts of the respondent Board for the financial year ending 2024-25. Although, these facts and figures were produced by way of a compilation on behalf of the petitioners, at the time of hearing, the respondent Board did not deny the contents thereof. This Court perused the same with the assistance of the learned counsel representing the rival parties. Having perused the said figures, we do not find any reason to hold that excessive amounts have been collected by the Board by levying the impugned regulatory fee, to the extent that it can be concluded to be excessive and disproportionate. All that the said figures indicate is that while prior to the impugned regulatory fee being brought into effect from 01.10.2022, the respondent Board was suffering a deficit, which had to be made good by contributions from the Government, after the impugned regulatory fee has been levied, the respondent Board is able to meet its expenditure and it is also left with surplus. Merely because the respondent Board has ended up having surplus in its collection, cannot ipso facto lead to the conclusion that the impugned regulatory fee is excessive and disproportionate, to be held ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation? 97. The petitioners have contended that the proviso to impugned Regulation 31A of the IBBI Regulations renders it retrospective in operation, and therefore, the impugned Regulation deserves to be struck down. Alternatively, it is contended that the proviso to clause (1) of impugned Regulation 31A needs to be struck down, even if the Regulation is to be sustained. 98. The thrust of the submissions of the petitioners, is on the assertion that once the resolution plan is approved by the CoC, under the scheme of the IBC, it is 'cast in stone'. The petitioners rely upon the provisions of the IBC, particularly Sections 30 and 31 thereof, read with judgements of the Supreme Court, to contend that once the resolution plan is approved by the CoC, it is binding on the resolution applicant as well as the CoC and since there cannot be any modification thereof, the proviso to impugned Regulation 31A of the IBBI Regulations, is rendered unsustainable as being retrospective in operation, for it would amount to allowing the resolution plan, approved by the CoC, being tinkered with. 99. By placing reliance on judgement of the Supreme Court in the case of Ebix Singapore Private Limit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the requirements of Section 30(2) of the IBC have been satisfied in the resolution plan. The aforesaid provision requires the examination of the resolution plan received from the resolution applicant and verifying whether it satisfies the requirements enumerated therein. There is an elaborate set of requirements but the crucial aspect of the matter is that under Section 30(2)(a) of the IBC, it is to be ensured that the resolution plan provides for payment of insolvency resolution process costs in a manner specified by the Board, in priority to the payment of other debts of the corporate debtor. Section 53 of the IBC, which specifies the waterfall mechanism for distribution of assets under clause (a) to sub-section (1) thereof, also places at the top the payment in full of the insolvency resolution process costs. Thus, when the adjudicatory authority considers the resolution plan approved by the CoC under Section 31 of the IBC, it has to ensure that the resolution plan provides for payment of insolvency resolution process costs in priority over other debts of the corporate debtor. The adjudicatory authority is also required to ensure that the other requirements specified in Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Section 31 of the IBC dated 06.04.2026 further throws light on the role of the adjudicatory authority while considering the resolution plan submitted after approval of the CoC. The said proviso specifies that the adjudicatory authority may, before rejecting the resolution plan, give notice to the CoC to rectify any defects in the resolution plan. Although the said amendment has been brought about recently, it is a pointer towards the manner in which role of the adjudicatory authority can be construed under the scheme of the IBC. There can be no doubt that when the adjudicatory authority exercises power under sub-section (2) of Section 31 of the IBC to reject a resolution plan, the consequence is drastic in the form of the process of liquidation being initiated under Section 33 thereof. The said consequence of liquidation under the scheme of the IBC is the last resort, as the focus is on reviving the corporate debtor as a going concern. It is perhaps for this reason that the word 'may' is used in sub-section (2) of Section 31 of the IBC, which states that when the adjudicatory authority is satisfied that the resolution plan does not conform to the requirements referred to in sub-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gned Regulation 31A of the IBBI Regulations is retrospective in nature, can be said to be fallacious. The proviso to impugned Regulation 31A of the IBBI Regulations specifies a particular date i.e. 01.10.2022 as the date from which it comes into operation. A bare reading of the proviso to Regulation 31A of the IBBI Regulations shows that it is operative from 01.10.2022. On a plain reading, it cannot be said to be retrospective. It is only because the petitioners are reading the role of the adjudicatory authority under Section 31 of the IBC in the aforementioned fallacious manner that they are claiming the effect of the proviso to Regulation 31A of the IBBI Regulations as being retrospective in nature. 107. Once the role of Adjudicatory Authority under the provisions of the IBC is understood in the correct perspective, it becomes clear that the argument regarding retrospective operation of the impugned regulation cannot be sustained. In this backdrop, it becomes clear that reliance placed on behalf of the petitioners on the judgements of the Supreme Court in the cases of Kalpraj Dharamshi and another vs. Kotak Investment Advisors Limited and another, (2021) 10 SCC 401; Jaypee Ken....
X X X X Extracts X X X X
X X X X Extracts X X X X
....catory authority would clearly be well within its powers to call for addition of the said regulatory fee in the resolution plan towards cost of CIRP. In this context, the admitted facts pertaining to the petitioners - Hazel Mercantile Limited and Suraksha Realty Limited show that in both the cases, the resolution plan was submitted before the adjudicatory authority for approval / sanction when the impugned Regulation 31A came into operation with effect from 01.10.2022. Therefore, it cannot be said that the regulation fee was sought to be imposed retrospectively on the said petitioners. 110. In the resolution plan proposed by Hazel Mercantile Limited, it was recorded that the provisions of the IBC, Rules and Regulations framed thereunder, as amended from time to time, would apply to the said resolution plan. It was also specifically provided that the CIRP costs would be paid upfront under the resolution plan and that the escalation or increase of CIRP cost shall also be paid in full. The resolution plan of Suraksha Realty Limited also contained such clauses and additionally, it contained an undertaking that the said petitioner would pay the CIRP costs as per the IBC and the Regul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or disproportionate in nature. The petitioners have failed to demonstrate that it could be said to be confiscatory in nature. 112. The provisions of the IBC, particularly Sections 5(13)(e), 196(1)(c), 240(2)(d) read with Regulations 31 and 31A of the IBBI Regulations, when appreciated in the correct perspective, clearly demonstrate that the impugned regulatory fee is correctly placed under the insolvency resolution process cost and the same not being excessive or disproportionate in nature, cannot be said to be amounting to colourable exercise of power. Apart from this, it is not even the case of the petitioners that there is any lack of legislative competence in respect of inclusion of regulatory fee in insolvency resolution process cost and there is no question of any bona fide or mala fide on the part of the Legislature to invoke the doctrine of colourable exercise of power. 113. It is also relevant to note that the petitioners have not even challenged the validity of Sections 5(13), 53, 196(1)(c) and 240(2)(d) of the IBC. Even the validity of Regulation 31(ba) of the IBBI Regulations has not been challenged. In the absence of any such challenge to the said provisions, the....