NCLT Guwahati: Liquidator Entitled to Fee Under Regulation 4(2) If CoC or SCC Fails to Fix Remuneration
Pranav B Prem
The Guwahati Bench of the National Company Law Tribunal (NCLT), comprising Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh, has ruled that where the Committee of Creditors (CoC) fails to fix the Liquidator's fee at the time of recommending liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016 (IBC), and the Stakeholders Consultation Committee (SCC) also does not fix the same as required under Regulation 4(1A) of the Liquidation Regulations, 2016, the Liquidator shall be entitled to a fee strictly in accordance with Regulation 4(2). The fee in such cases must be calculated as a percentage of the amount realized and distributed during the liquidation process.
The order came in response to an application filed under Section 60(5) of the IBC read with Regulation 2A of the Liquidation Regulations by Kannan Tiruvengadam, the Liquidator of JAS Infrastructure and Power Limited. The Liquidator had sought a direction for payment of a fixed monthly remuneration of ₹2,50,000 from the date of his appointment until the completion of the liquidation process. He argued that he had diligently discharged his duties under the Code despite several difficulties including prolonged litigation, regulatory roadblocks, encroachments on land parcels, and attachment of the company’s assets by the Enforcement Directorate.
The Applicant contended that under Regulation 4(2), he is entitled to a fee in two parts: (i) at the same rate as the Resolution Professional during the period of any compromise or arrangement under Section 230 of the Companies Act, 2013, and (ii) as a percentage of the amount realised and distributed for the remaining liquidation period. He further stated that the CoC had failed to fix his remuneration under Regulation 39D of the CIRP Regulations at the time of recommending liquidation and that the SCC had also not fixed the fee in its first meeting. Due to this inaction, the Applicant claimed entitlement under Regulation 4(2) and urged that a reasonable monthly fee of ₹2,50,000 be awarded.
The Respondents, which included major financial creditors such as Punjab National Bank and Assets Care and Reconstruction Enterprise Limited, objected to the prayer. They argued that no provision in the IBC or the Liquidation Regulations allows for the payment of fixed monthly remuneration to a Liquidator. They submitted that the Liquidator’s fee, in the absence of fixation by CoC or SCC, must be governed by Regulation 4(2), which stipulates that fees are to be calculated as a percentage of amounts realised and distributed from the liquidation estate.
The Respondents further highlighted that the liquidation estate had not yet been monetised due to ongoing asset attachment under the Prevention of Money Laundering Act (PMLA), thereby rendering any monthly fee claim unjustified. They also pointed out that during the arguments on May 20, 2025, counsel for the Applicant had orally withdrawn the prayer for monthly remuneration, which further undermines the relief sought.
Upon consideration, the Tribunal noted that although the Applicant claimed to have withdrawn the prayer for monthly remuneration during the hearing, there was no formal record or written submission confirming this withdrawal. Therefore, the Tribunal proceeded to decide the matter on merits.
The Bench observed that the Applicant's repeated requests for monthly fees had been placed before the SCC and in Joint Lenders’ Meetings (JLM) but failed to receive approval. Importantly, the Financial Creditors had unanimously resolved that the Liquidator's fee should be governed solely by Regulation 4. The Tribunal emphasized that any deviation from the statutory framework could only be permitted through a resolution passed by the CoC or SCC, which was absent in the present case. The Tribunal held: “In the absence of stakeholder approval and in light of the statutory provisions under Regulation 4, this Tribunal is not inclined to override the framework provided under the Code and Regulations, nor can it direct stakeholders to adopt a fixed-fee structure at variance with the existing mechanism.”
It concluded that since neither the CoC nor the SCC fixed the Liquidator’s remuneration, the Applicant is only entitled to claim fees as per Regulation 4(2)(b) — calculated as a percentage of the amount realised (net of liquidation costs) and the amount distributed. The Tribunal also reiterated that under Section 34(9) read with Section 53 of the IBC, the fee must be paid only from the proceeds of the liquidation estate.
Accordingly, the Tribunal dismissed the Liquidator’s application seeking a fixed monthly remuneration of ₹2,50,000 from the date of his appointment, both with retrospective and prospective effect. It held that in the absence of fee fixation by the CoC or SCC, the Liquidator is only entitled to fees in terms of Regulation 4(2) of the Liquidation Regulations, i.e., as a percentage of the amount realised and distributed from the liquidation estate.
Cause Title: Kannan Tiruvengadam, liquidator of the JAS Infrastructure and Power Limited -Versus- Assets Care & Reconstruction Enterprise Limited and Ors.
Case No: IA (IBC)/155/GB/2024 In CP(IB)/23/GB/2022 In CP(IB)/1290/KB/2018
Coram: Mr. Rammurti Kushawaha [Judicial Member], Mr. Yogendra Kumar Singh [Technical Member]
