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Kochi Rejects Plea For Extra Fees Amidst Prolonged Litigation And Stay Periods
The () Kochi Bench, comprising Judicial Member Shri Vinay Goel and Technical Member Shri Ravichandran Ramasamy, has delivered a firm ruling regarding the compensation of . In a recent order, the tribunal dismissed an application filed by the of M/s Raihan Healthcare Private Limited, who sought additional remuneration for a 35.5-month period characterized by prolonged litigation and pandemic-related delays.
The Struggle for Compensation
The , appointed on , argued that despite multiple —including those arising from the nationwide COVID-19 lockdown and complex legal battles—he continued to manage the hospital premises, resulting in significant value maximization for the stakeholders. Contending that these delays were entirely beyond his control, the applicant requested the tribunal to fix his fees for this "exceptional period" on par with the prescribed for a .
Conversely, respondents including and argued that the had already been fully compensated. They asserted that the fee structure was fixed at a percentage of realized assets under Regulation 4 of the () Regulations, 2016, and that the had already received over ₹55 lakh in remuneration, along with separate payments for legal and incidental costs.
Defining Statutory Limits
The observed that the ’s remuneration is strictly governed by the statutory framework of the . The bench clarified that the tribunal’s cannot be used to create remedies inconsistent with the established legal framework, especially when a structured mechanism for fees already exists.
The tribunal emphasized that once a fee structure is agreed upon and paid, a
is
from seeking additional payments based on
. The court warned that deviating from this standard could have systemic consequences:
"If we allow the exclusion of such periods, practically, the Resolution Professionals/Liquidators would cease to show interest in such litigations. In other words, such an interpretation would dilute the incentive for expeditious completion of the
."
Key Observations from the Bench
Highlighting the importance of adherence to the statutory code, the tribunal noted:
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"The Legislature, in its wisdom, has provided a structured mechanism for determining the 's remuneration with the object of ensuring that the is completed in a time-bound manner."
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"Any claim for additional remuneration beyond the fee already fixed under Regulation 4 is contrary to the statutory scheme and cannot be sustained."
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"The delay in proceeding with the ... cannot, by itself, be attributed to any omission or negligence on the part of the , but simultaneously, such circumstances do not automatically confer a legal right to claim enhancement of remuneration."
A Finality to Fee Disputes
The tribunal concluded that granting the relief sought would not only burden the at the expense of creditors but also amount to unwarranted judicial modification of the statutory scheme. By dismissing the application, the has reinforced the principle that liquidators must operate within the fee structures pre-approved by the . This decision serves as a significant precedent, underscoring that litigation-related delays do not create an automatic entitlement to higher fees under the IBC regime.
