# In the matter of Jejani Pulp and Paper Mills Private Limited IA No. 1818-MB-2020 in CP (IB) No. 1833-MB-2017

> NCLT judgment dated 2021-05-27. Citation: TCN-2021-NCLT-02093. The case involves an application by JM Financial Asset Reconstruction Company Limited, the…

- **Court:** NCLT
- **Order date:** 27 May 2021
- **Citation:** TCN-2021-NCLT-02093
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jejani-pulp-and-paper-mills-private-limited-ia-no-1818-mb-2020-in-cp-ib-no-1833-84691462

## Summary

### Background

The case involves an application by JM Financial Asset Reconstruction Company Limited, the financial creditor of the corporate debtor, Jejani Pulp and Paper Private Limited, seeking direction to the liquidator, Prasad Kamlakar Dharap, to charge his fees under Regulation 4(1) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The corporate debtor was ordered into liquidation on 2019-10-18, and the respondent was appointed as the liquidator.

## Facts

JM Financial Asset Reconstruction Company Limited, the financial creditor, filed an application against Prasad Kamlakar Dharap, the liquidator of Jejani Pulp and Paper Private Limited. The application sought a direction to the liquidator to charge fees under Regulation 4(1) of the IBBI (Liquidation Process) Regulations, 2016. The corporate debtor was ordered into liquidation on 2019-10-18, and the respondent was appointed as the liquidator. The liquidator had forwarded an engagement letter on 2018-12-14 and claimed ₹. 3,15,263/- after the sale of plants and machinery, based on Regulation 4(2)(b). The applicant requested the liquidator to revise fees as per Regulation 4(1) via letter dated 2020-09-12, but the liquidator refused. The CoC did not pass any resolution

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## Issues and analysis

### Issue 1: Whether the liquidator's fees should be determined under Regulation 4(1) or Regulation 4(2)(b) of …

**Ratio:** The fee payable to the liquidator shall be in accordance with the decision taken by the

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**Reasoning:** The court reasoned that since the CoC had not passed any resolution fixing the

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**Interpretation:** Regulation 4(1) provides for the CoC to determine the liquidator's fees, while

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**Application:** Since the CoC did not fix the liquidator's fees, the court applied Regulation

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## Parties

- **Judges:** Janab Mohammed…; V. Nallasen…
- **Appellants:** JM Financial…
- **Respondents:** Jejani Pulp and…; Prasad Kamlakar…

## Timeline

- **2017-01-01 — CP (IB)…**: CP (IB) No. 1833/MB/2017…
- **2018-12-14 — Engagement…**: The Respondent sent an engagement letter to act…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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