Bombay High Court Partially Nixes IBBI Clarification On Liquidator Fee Rules

The Bombay Excessive Court docket on Thursday scrapped components of a clarification issued for the way liquidators’ charges are calculated.

The clarification that got here out in September 2023 was challenged for basically amending Liquidation Course of Laws with out correct authority fairly than merely explaining them additional. The court docket dominated in opposition to particular paragraphs of the notification, stating that they launched substantive adjustments fairly than simply clarifications.

The petitioner, who’s a chartered accountant registered as an insolvency skilled with the IBBI, was accused of charging extreme charges through the liquidation strategy of an organization referred to as Hindustan Dorr Oliver Ltd. The IBBI issued present trigger notices to the petitioner, alleging misconduct.

The court docket noticed that the IBBI’s rules must be introduced to Parliament for assessment and might solely turn into regulation after a specified interval.

In its choice, the court docket upheld some components of the round that clarified current authorized phrases whereas hanging down others that launched new necessities. The court docket additionally instructed the IBBI to deal with the petitioner’s case pretty and promptly whereas avoiding duplicative proceedings.

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