Payment of liquidator fee mandatory even if secured creditor proceeds to realise its security interest

Shikshak Sahakari Bank Ltd. Vs Jagdish Kumar Parulkar (NCLAT Delhi)

NCLAT Delhi held that even if the secured creditor proceeds to realise its security interest it is liable to pay liquidator fee as contemplated under Regulation 21A (2)(a) of the Liquidation Regulations, 2016.

Facts- NCLT, Mumbai, initiated Corporate Insolvency Resolution Process (CIRP) proceeding against the Corporate Debtor on 16.09.2021. Since CIRP did not result in fruitful result, the NCLT passed orders for liquidation of the Corporate Debtor.

The Respondent / Liquidator made public announcement in compliance with Regulation 12 of the Liquidation Process Regulation on 06.04.2023. The last date for submission of claims was 06.05.2023. The Appellant, Shikshak Sahakari Bank Ltd., filed its claim in ‘Form D’ for an amount of Rs 5,95,45,557/- as on the liquidation commencement date.

The Respondent / Liquidator accepted the claim of the Appellant in full and intimated the Respondent. The Appellant had opted to realise its security interest through its own proceedings under the SARFAESI Act, 2002, in the manner provided u/s. 52(1) (b) of the Code and decided the reserve price to be Rs 2,24,15,000/-.

The Respondent / Liquidator raised Rs 14,48,965/- as fee of the Liquidator vide email dated 15.05.2023. The Appellant, Shikshak Sahakari Bank Ltd., paid sum amount of Rs 58,424/- and Rs 59,130/- to the Liquidator. The Appellant disputed the Respondent’s fee vide email dated 31.07.2023 as it was not under the provisions of the law.