Amit Gupta Vs Insolvency and Bankruptcy Board of India (Bombay High Court)
a) Paragraph 2.1 and Paragraph 2.5 of the Impugned IBBI Circular dated 28th September, 2023 are hereby struck down as being ultra vires the LP Regulations and the IBC. They introduce substantive amendments to statutory legislation even while purporting to be mere clarifications. The changes they seek to bring in are not even covered by the IBC and the LP Regulations. Due process by way of compliance with the statutory requirements of the Law-Making Regulations is missing. Therefore, in the course of conducting the quasi-judicial proceedings, the IBBI is prohibited from placing any reliance on Paragraph 2.1 and Paragraph 2.5 of the Impugned Circular in determining if any fee charged by the Petitioner in the liquidation assignments in question, was in excess of permissible thresholds;
b) Paragraph 2.2 is upheld in its terms since it does not stipulate any new standard and rightly clarifies the legal position under Section 5(16) of the IBC read with Regulation 2(1)(ea) of the LP Regulations in discerning the meaning of the term “liquidation cost”. The definitional content of Regulation 2(1) (ea) of the LP Regulations is only illustrative of the types of “liquidation cost” that are covered by the term “any cost incurred” under Section 5(16) of the IBC;
