# In the matter of Canara Bank  Vs Liquidator Punjab Basmati Rice Limited - In Liquidation

> NCLAT judgment dated 2024-04-01. Citation: TCN-2024-NCLAT-00555. The case involves an appeal against an order by the National Company Law Tribunal (NCLT),…

- **Court:** NCLAT
- **Order date:** 1 Apr 2024
- **Citation:** TCN-2024-NCLAT-00555
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/canara-bank-vs-liquidator-punjab-basmati-rice-limited-in-liquidation-896ce020

## Summary

### Background

The case involves an appeal against an order by the National Company Law Tribunal (NCLT), Chandigarh, concerning the fees eligible to the liquidator of Punjab Basmati Rice Ltd., which is under liquidation. The NCLT had allowed an application by the liquidator and dismissed an application by the Stakeholders Consultation Committee. The dispute centers on the time period taken by the liquidator in realizing and distributing assets, considering exclusions and stays granted by the Adjudicating Authority.

## Facts

Punjab Basmati Rice Ltd. underwent Corporate Insolvency Resolution Process (CIRP) initiated under Section 10 of the Insolvency and Bankruptcy Code, 2016. The CIRP was admitted by NCLT, Chandigarh on 2019-02-18. Due to the absence of a viable resolution plan, a liquidation order was passed on 2019-12-18. The liquidator attempted to sell assets through auction, and the liquidation estate was eventually sold via open auction on 2023-04-01 for Rs.26.77 Crores against a reserve price of Rs.25.00 Crores. The core dispute concerns the liquidator's fees, governed by Regulation 4 of the IBBI (Liquidation Process) Regulations, 2016. The Stakeholders Consultation Committee and the liquidator disagree on the total liquidation period, which affects the applicable fee percentage.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in excluding the period from 03.10.2021 to 08.11.2021 from …

**Ratio:** The ratio is based on the principle that exclusions from the liquidation period for fee

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**Reasoning:** The court reasoned that the liquidator was not under any valid restriction during the

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**Interpretation:** The interpretation focuses on the IBBI's clarification that exclusions for fee

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**Application:** The court applied this ratio to the facts by determining that the stay on the

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## Parties

- **Judges:** Rakesh Kuma…; Ajai Das Me…
- **Appellants:** STAKEHOLDERS…
- **Respondents:** Punjab Basmati…; Sanjay Kumar…
- **Advocates:** Rakesh…; Eshna K…; +1 more

## Timeline

- **2018-01-01 — CP (IB) No.340/Chd/Pb/20…**: Impugned…
- **2019-02-18 — CIRP Admi…**: Corporate Insolvency Resolution Process…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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