Rajaram Food Products India Ltd. Vs. Joint District Registrar (Class-1) and Collector of Stamps, Nashik and Ors. - Thus, Section 17(2)(xii) of the Registration Act applies in the facts of the present case in favour of the petitioner. The liquidator conducting sale by way of public auction under the provisions of the IBC and on the orders of the NCLT, certainly qualifies to be an officer covered under the said provision i.e. Section 17(2)(xii) of the Registration Act.

 HC Bombay (2026.07.14) in  Rajaram Food Products India Ltd. Vs. Joint District Registrar (Class-1) and Collector of Stamps, Nashik and Ors.  [(2026) ibclaw.in 4001 HC, Writ Petition No. 3018 of 2026] held that;

• Section 17(2)(xii) of the Registration Act squarely applies. Therefore, the position of law clarified by the Supreme Court in the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others (supra) applies in favour of the petitioner, so long as only a copy of the said sale certificate issued to the petitioner, is to be entered in Book No.1, as per Section 89(4) of the Registration Act.

• Thus, Section 17(2)(xii) of the Registration Act applies in the facts of the present case in favour of the petitioner. The liquidator conducting sale by way of public auction under the provisions of the IBC and on the orders of the NCLT, certainly qualifies to be an officer covered under the said provision i.e. Section 17(2)(xii) of the Registration Act.

Excerpts of the Order; 

The petitioner is an auction purchaser, aggrieved by an order dated 16.02.2026 passed by respondent No.1 (the said order), whereby the petitioner has been directed to pay stamp duty on the sale certificate issued in its favour in pursuance of an auction sale. According to the petitioner, on a proper reading of the provisions of the Registration Act, 1908 (hereinafter referred to as the Registration Act) and the Maharashtra Stamp Act, 1958 (hereinafter referred to as the Stamp Act), along with judgements of the Supreme Court and this Court, the respondent No.1 has erred in insisting upon the petitioner to pay stamp duty on the sale certificate, even when the said certificate is only to be entered in Book No.1, as mandated under Section 89(4) of the Registration Act.

# 2. A corporate debtor M/s. Gonglu Agro Pvt. Ltd. underwent Corporate Insolvency Resolution Process (CIRP) under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). But, the CIRP did not result in a successful resolution plan and accordingly, by an order dated 05.01.2024, the National Company Law Tribunal, Chennai (NCLT) directed liquidation of the said corporate debtor. Respondent No.5 was appointed as liquidator on the corporate debtor for sale of its assets. An e-auction was held on 30.12.2024 with regard to the specific immovable property of the corporate debtor and in the auction, the petitioner emerged as the successful bidder. Consequently, upon the petitioner depositing the entire consideration, a sale certificate dated 30.01.2026 was issued in favour of the petitioner.

# 3. On 03.02.2026, respondent No.5 – liquidator sent an email along with copy of sale certificate to respondent No.1 – Joint District Registrar (Class-1) & Collector of Stamps and respondent No.2 – Sub-Registrar, for necessary action under Section 89(4) of the Registration Act. The petitioner also submitted a representation dated 02.02.2026 to the said respondents as well as respondent No.3 – Inspector General of Registration and Controller of Stamps, relying upon the judgements of the Supreme Court, to contend that the sale certificate was exempted from compulsory registration and as per statutory requirement under Section 89(4) of the Registration Act, it was to be merely entered in Book No.1, with no stamp duty payable thereon.

# 4. On 16.02.2026, respondent No.1 passed the said order, holding that the sale certificate having been issued in pursuance of proceedings conducted under the IBC, attracted payment of stamp duty under Article 16 of Schedule I of the Stamp Act. In that light, the representation submitted by the petitioner was filed. The petitioner filed an appeal before the Deputy Inspector General of Registration and Deputy Collector of Stamps, Nashik Division, to challenge the said order passed by respondent No.1. But, the appeal was dismissed as not maintainable, on the ground that the order passed by respondent No.1 did not determine or compute any stamp duty payable.

# 5. In this backdrop, the petitioner filed the present writ petition. Respondent Nos.1 to 3 filed their affidavit-in-reply, referring to provisions of the Registration Act and Stamp Act, to contend that no interference was warranted in the said order and that the petitioner is liable to pay stamp duty on the sale certificate. The writ petition was taken up for hearing.

# 6. Dr. Chandrachud, the learned counsel appearing for the petitioner submitted that the said order is erroneous on a plain reading of the provisions of the Registration Act. It was submitted that the Supreme Court, in the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others, 2024 SCC OnLine SC 3372, had categorically held that such a sale certificate issued in pursuance of auction sale conducted by an authorized officer, was not compulsorily registrable and that the law required only a copy of the same to be forwarded to the registering authority, further holding that stamp duty was not attracted in such a situation. The said position of law had been consistently followed by this Court in various cases, including in the cases of Vishal Laxman Arkal vs. Inspector General of Registration and others, 2025 SCC Online Bom 4727 and Khush Housing Finance Pvt. Ltd. vs. State of Maharashtra, (order dated 27.01.2026 passed in Writ Petition No.3692 of 2023).

# 7. It was further submitted that in the reply affidavit filed on behalf of respondent Nos.1 to 3, for the first time, reliance was placed on Maharashtra Amendment to the Registration Act, whereby clauses (f), (g) and (h) were added to Section 17(1) of the Registration Act. In this context, learned counsel for the petitioner relied upon a document tendered in a compilation of documents, showing that by Maharashtra Act No. X of 2012, which received assent of the President on 25.05.2012, the aforesaid amendment had been inserted in Section 17(1) of the Registration Act. The respondents relied upon clause (g) of sub-section 1 of Section 17 of the Registration Act, to contend that since the sale certificate had been issued by an officer or competent authority under a recovery Act, stamp duty was necessarily payable.

# 8. In order to deal with the aforesaid specific contention raised on behalf of the respondents, the learned counsel for the petitioner relied upon judgements of the Supreme Court in the cases of Glas Trust Company LLC vs. Byju Raveendran and others, (2025) 3 SCC 625, Tottempudi Salalith vs. State Bank of India and others, (2024) 1 SCC 24 and Hindustan Construction Company Limited and another vs. Union of India and others, (2020) 17 SCC 324. It was submitted that in the said judgements, the Supreme Court had made it abundantly clear that IBC is not a debt recovery legislation, but it has been enacted for the purpose of revival of a company that has fallen in debt.

# 9. It was submitted that even otherwise, Section 17(2)(xii) of the Registration Act exempted a sale certificate issued to a purchaser of any property sold by public auction by a Civil or Revenue Officer. It was submitted that in the present case, the liquidator acting under the provisions of the IBC and upon orders passed by the NCLT, qualifies as a Civil officer and therefore, exemption from payment of stamp duty is evident from a proper interpretation of the relevant provisions. On this basis, it was submitted that the writ petition deserved to be allowed.

# 10. On the other hand, Mr. Chandurkar, learned Addl. GP appearing on behalf of respondent Nos.1 to 4, submitted that as per Section 2(g)(iv) of the Stamp Act, the sale certificate signified a conveyance by means of an instrument, as defined in Section 2(l) thereof. Consequently, as per Section 3 of the Stamp Act read with Article 16 of Schedule I thereof, stamp duty was leviable at the rate specified therein. It was submitted that clause (g) of sub-section 1 of Section 17 of the Registration Act, concerning Maharashtra Amendment, clearly covers the position in favour of the said respondents and therefore, no error can be attributed to the said order.

# 11. It was submitted that when these provisions are appreciated in the correct perspective, the judgements of the Supreme Court and this Court, relied upon by the petitioner, cannot come to its aid, thereby demonstrating that the writ petition deserves to be dismissed.

# 12. We have considered the rival submissions. In the light of the contentions raised on behalf of the rival parties, it would be appropriate to refer to the relevant statutory provisions. Section 17 of the Registration Act pertains to documents of which registration is compulsory. Sub-section (1) enumerates the documents that are compulsorily required to be registered and sub-section (2) gives the details of documents that are exempted from such compulsory registration. Section 89 of the Registration Act pertains to those orders, certificates and instruments, copies of which are only required to be sent to the registering officers and filed.

# 13. Section 17(1)(g) of the Registration Act, as per the Maharashtra Amendment No.X of 2012, copy of which is tendered in a compilation of documents by the learned counsel for the petitioner; Sections 17(2)(xii) and 89 thereof, read as follows:

• ‘17. Documents of which registration is compulsory.—

• (1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force namely:-

• xxx xxx xxx

• (g) sale certificate issued by any competent officer or authority under any recovery Act;’

• ‘(2) Nothing in clauses (b) and (c) of sub-section (1) applies-

• xxx xxx xxx

• (xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer.’

• ‘89. Copies of certain orders, certificates and instruments to be sent to registering officers and filed.—

• (1) Every officer granting a loan under the Land Improvement Loans Act, 1883 (19 of 1883), shall send a copy of his order to the registering officer within the local limits of whose jurisdiction the whole or any part of the land to be improved or of the land to be granted as collateral security, is situate, and such registering officer shall file the copy in his Book No. 1.

• (2) Every Court granting a certificate of sale of immovable property under the Code of Civil Procedure, 1908 (5 of 1908), shall send a copy of such certificate to the registering officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in such certificate is situate, and such officer shall file the copy in his Book No. 1.

• (3) Every officer granting a loan under the Agriculturists’ Loans Act, 1884 (12 of 1884), shall send a copy of any instrument whereby immovable property is mortgaged for the purpose of securing the repayment of the loan, and, if any such property is mortgaged for the same purpose in the order granting the loan, a copy also or that order, to the registering officer within the local limits of whose jurisdiction the whole or any part of the property so mortgaged is situate, and such registering officer shall file the copy or copies as the case may be, in his Book No. 1.

• (4) Every Revenue Officer granting a certificate of sale to the purchaser of immovable property sold by public auction shall send a copy of the certificate to the registering officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in the certificate is situate, and such officer shall file the copy in his Book No. 1.’

# 14. Section 2(g) of the Stamp Act states that the conveyance includes conveyance on sale, every instrument, every decree or order of a Civil Court and every order, inter alia, made by the NCLT under specific provisions of the Companies Act and the IBC by which property whether movable or immovable, is transferred to any person. Section 2(l) of the Stamp Act defines instrument as including every document by which any right or liability is created, transferred, limited, extinguished, etc. or purports to do so. Section 3 of the Stamp Act pertains to an instrument chargeable with duty and it specifically refers to instruments mentioned in Schedule I. Article 16 of Schedule I of the Stamp Act refers to a certificate of sale issued in the context of the property sold in a public auction by Civil or Revenue court, with the extent of stamp duty payable thereon.

# 15. In the impugned order passed by respondent No.1, while rejecting the contentions of the petitioner, reference is made only to Article 16 of Schedule I of the Stamp Act and it is held that stamp duty is payable on sale certificate issued to the petitioner. It is significant to note that in the impugned order, there is no reference to Section 17(1)(g) of the Registration Act, introduced by way of Maharashtra Amendment. In other words, respondent Nos.1 to 3 have sought to defend and justify the impugned order in their affidavit on reasons and grounds not found in the impugned order itself. As per settled law, the impugned order could be defended only on the reasons found therein.

# 16. Nonetheless, this Court has considered the rival submissions made in that regard. Since the petitioner heavily relies upon judgements of the Supreme Court and this Court in the context of the question of liability to pay stamp duty on a sale certificate only sought to be entered in Book No.1 under Section 89(4) of the Registration Act, it would be appropriate to refer to the said judgements.

# 17. In the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others (supra), the Supreme Court considered the earlier judgements and found that it was already a settled position of law that a sale certificate does not require registration under Section 17(2)(xii) of the Registration Act and that it also does not attract stamp duty. A copy of the sale certificate is simply required to be entered in Book No.1, as per Section 89(4) of the Registration Act, so long as the sale certificate remains as it is. It was further held in the said judgement that only when the auction purchaser uses the certificate for some other purpose, that stamp duty would be payable.

# 18. The relevant portion of the judgement of the Supreme Court in the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others (supra), reads as follows:

• ‘13. The short question that falls for our consideration in this appeal is whether it is mandatory for the successful auction purchaser to deposit the stamp duty for the sale certificate to be issued to it in view of the provisions of the Stamp Act and the Registration Act.

• 14. This Court in Municipal Corporation of Delhi v. Pramod Kumar Gupta, (1991) 1 SCC 633 : AIR 1991 SC 401, after examining the relevant provisions of Order XXI of the Code of Civil Procedure, observed that the title to the property put on auction sale passes under the law when the sale is held. The owners and certain other interested persons are afforded opportunity under the CPC to assail the sale and make a prayer for setting aside the sale on certain enumerated grounds. However, once such objections are disposed of without disturbing the sale, the sale stands confirmed under Order XXI Rule 92 of the CPC. Thereafter, the sale certificate is issued under Order XXI Rule 94. The Court observed that this chronology of events made it clear that the transfer becomes final when an Order under Rule 92 of Order XXI is made and the issuance of a sale certificate under Rule 94 is only a formal declaration of the effect of such confirmation. Such issuance of certificate does not create or extinguish any title and thus would not attract any stamp duty which is applicable qua an instrument of sale of immovable property.

• 15. In Smt. Shanti Devi L. Singh v. Tax Recovery Officer, (1990) 3 SCC 605 : AIR 1991 SC 1880, this Court observed that since the certificate of sale is not a compulsorily registrable document in lieu of Section 17(2)(xii) of the Registration Act, the transfer of title in favour of the auction purchaser would not be vitiated on account of non-registration of the sale certificate.

• 16. In B. Arvind Kumar v. Govt. of India, (2007) 5 SCC 745, this Court observed that when a property is sold by public auction in pursuance of an order of the court and the bid is accepted and the sale is confirmed by the court in favour of the purchaser, the sale becomes absolute and the title vests in the purchaser. A sale certificate is issued to the purchaser only when the sale becomes absolute. The sale certificate is merely the evidence of such title. It is well settled that when an auction-purchaser derives title on confirmation of sale in his favour, and a sale certificate is issued evidencing such sale and title, no further deed of transfer from the court is contemplated or required. Although in the said case, the sale certificate was registered yet this Court proceeded to observe that a sale certificate issued by a court or an officer authorized by the court, does not require registration. Section 17(2) (xii) of the Registration Act, 1908 specifically provides that a certificate of sale granted to any purchaser of any property sold by a public auction by a civil or revenue officer does not fall under the category of non-testamentary documents which require registration under sub-section (b) and (c) of Section 17(1) of the said Act.

• 17. The position of law is thus settled that a sale certificate issued to the purchaser in pursuance of the confirmation of an auction sale is merely evidence of such title and does not require registration under Section 17(1) of the Registration Act. It is not the issuance of the sale certificate which transfers the title in favour of the auction purchaser. The title is transferred upon successful completion of the sale and its confirmation by the competent authority after all the objections against the sale have been disposed of.

• 18. Recently, a three-Judge Bench of this Court in Esjaypee Impex Private Limited v. The Asst. General Manager and Authorized Officer Canara Bank, (2021) 11 SCC 537 observed that the mandate of law that flows from a combined reading of Sections 17(2)(xii) and 89(4) of the Registration Act respectively is that the auction purchaser is entitled to receive the original sale certificate and a copy of the same is required to be forwarded to the Sub-Registrar for the purpose of filing in Book 1 as per the Registration Act.

• 19. In Inspector General of Registration v. G. Madhurambal, 2022 SCC OnLine SC 2079, a two-Judge Bench of this Court observed that the consistent position of law is that a certificate of sale cannot be regarded as a conveyance subject to stamp duty. The Court further observed that once a direction is issued for the duly validated certificate to be issued to the auction purchaser with a copy forwarded to the registering authorities to be filed in Book I as per Section 89 of the Registration Act, it has the same effect as registration and requirement of any further action is obviated.

• 20. The position of law discussed above makes it clear that sale certificate issued by the authorised officer is not compulsorily registrable. Mere filing under Section 89(4) of the Registration Act itself is sufficient when a copy of the sale certificate is forwarded by the authorised officer to the registering authority. However, a perusal of Articles 18 and 23 respectively of the first schedule to the Stamp Act respectively makes it clear that when the auction purchaser presents the original sale certificate for registration, it would attract stamp duty in accordance with the said Articles. As long as the sale certificate remains as it is, it is not compulsorily registrable. It is only when the auction purchaser uses the certificate for some other purpose that the requirement of payment of stamp duty, etc. would arise.’

# 19. The said judgement was followed by this Court in the case of Vishal Laxman Arkal vs. Inspector General of Registration and others (supra), even when the case arose from auction sale conducted under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Securitisation Act). The said position was further followed by this Court in the case of Khush Housing Finance Pvt. Ltd. vs. State of Maharashtra (supra). It is significant to note that when the said judgements were delivered by a Division Bench of this Court, relying upon the position of law clarified by the Supreme Court in the aforementioned judgement in the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others (supra), the respondent – State authorities made no reference to Section 17(1)(g) of the Registration Act (Maharashtra Amendment). As noted hereinabove, even in the impugned order, the respondent No.1 did not refer to and rely upon the same.

# 20. It is in this backdrop that the true purport of Section 17(1)(g) of the Registration Act (Maharashtra Amendment) will have to be appreciated, in the light of position of law clarified by the Supreme Court. A perusal of the same shows that it refers to a sale certificate issued by any competent authority or officer under any recovery Act. It is to be noted that although this clause pertains to sub-section (1) of Section 17 of the Registration Act pertaining to the documents that are compulsorily registrable, there is no reference to ‘auction sale’ or ‘public auction’. As opposed to this, in clause (xii) of subsection (2) of Section 17, which pertains to documents exempted from registration, there is a specific reference to public auction and it is specified therein that any certificate of sale granted to a purchaser of any property sold by ‘public auction’ by a Civil or Revenue officer, is exempted from registration.

3 21. If this distinction is taken into consideration and applied to the facts of the present case, we find that since the sale certificate in the present case was issued in favour of the petitioner, with regard to the subject property sold by public auction by the liquidator under the provisions of the IBC, Section 17(2)(xii) of the Registration Act squarely applies. Therefore, the position of law clarified by the Supreme Court in the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others (supra) applies in favour of the petitioner, so long as only a copy of the said sale certificate issued to the petitioner, is to be entered in Book No.1, as per Section 89(4) of the Registration Act.

# 22. The position of law clarified in paragraph No.20 of the abovequoted portion of judgement of the Supreme Court in the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others (supra), clearly applies in favour of petitioner. Therefore, the sale certificate issued in favour of petitioner is not compulsorily registrable. Only a copy of the same is required to be entered in Book No.1, as per Section 89(4) of the Registration Act. So long as the sale certificate remains as it is with the petitioner, it is neither required to be registered, nor does it attract stamp duty. It is only when the petitioner seeks to use the sale certificate for some other purpose, that the requirement of payment of stamp duty would arise.

# 23. In this context, when the prayer clauses of the present writ petition are perused, it is found that apart from seeking to set aside the said order passed by respondent No.1, the petitioner has sought a direction to respondent Nos.1 and 2 to accept the sale certificate issued by the liquidator and to file the same in Book No.1, as mandated under Section 89(4) of the Registration Act, without insisting upon payment of stamp duty or registration fee. We find that the said reliefs claimed in the present petition, are in consonance with the law laid down by the Supreme Court in this context.

# 24. As far as Section 17(1)(g) of the Registration Act (Maharashtra Amendment) is concerned, a perusal of the said provision shows that it pertains to a sale certificate issued by a competent officer or authority under any ‘recovery Act’. We find considerable force in the submission made on behalf of the petitioner that the IBC cannot be categorized as a recovery Act, in the light of the objects and reasons for which it was enacted. In the cases of Glas Trust Company LLC vs. Byju Raveendran and others (supra); Tottempudi Salalith vs. State Bank of India and others (supra) and Hindustan Construction Company Limited and another vs. Union of India and others (supra), the Supreme Court has reiterated the position of law with regard to the nature and purpose of enactment of IBC, relying upon earlier judgement in the case of Swiss Ribbons Private Limited and another vs. Union of India and others, (2019) 4 SCC 17 and other judgements, to hold that IBC is not meant to be a recovery mechanism and that it is not a debt recovery legislation. On the other hand, it has been repeatedly held that it is a mechanism for revival of a company fallen in debt. Therefore, the respondents are not justified in relying upon Section 17(1)(g) of the Registration Act, to justify the impugned order.

# 25. Even otherwise, as noted hereinabove, the said provision does not refer to a sale certificate issued in pursuance of sale of a property by public auction, while the exemption clause i.e. Section 17(2)(xii) of the Registration Act specifically pertains to such a sale certificate issued to a purchaser of property sold by public auction. Thus, Section 17(2)(xii) of the Registration Act applies in the facts of the present case in favour of the petitioner. The liquidator conducting sale by way of public auction under the provisions of the IBC and on the orders of the NCLT, certainly qualifies to be an officer covered under the said provision i.e. Section 17(2)(xii) of the Registration Act.

# 26. Thus, viewed from any angle, we find that respondent No.1 could not have passed the impugned order, insisting upon payment of stamp duty on the sale certificate issued in favour of the petitioner. The contentions raised on behalf of the petitioner were not dealt with and respondent No.1 was not justified in ignoring the aforesaid position of law by simply relying upon Article 16 of Schedule I of the Stamp Act.

# 27. In view of the above, the impugned order deserves to be set aside and the writ petition deserves to be allowed.

# 28. Accordingly, the writ petition is allowed in terms of prayer clauses (a) to (c), which read as follows:

• ‘a. Issue a Writ of Certiorari or any other appropriate writ, order, or direction calling for the records and proceedings leading to the issuance of the Impugned Order/Letter No.772/2026 dated 16.02.2026 issued by Respondent No. 1, and after examining the legality and validity thereof, be pleased to QUASH and SET ASIDE the same as being illegal, arbitrary, and contrary to the law laid down by the Hon’ble Supreme Court;

• b. Issue a Writ of Mandamus or any other appropriate writ, order, or direction, directing Respondent Nos. 1 and 2 to forthwith accept the Sale Certificate dated 30.01.2026 issued by the Liquidator (Respondent No. 5) and file the same in Book No. 1 as mandated under Section 89(4) of the Registration Act, 1908, without insisting on the payment of stamp duty or registration fees;

• c. Declare that the Sale Certificate dated 30.01.2026 issued by the Liquidator under the Insolvency and Bankruptcy Code, 2016, is not a compulsorily registrable document under Section 17 of the Registration Act, 1908, and is exempt from the payment of stamp duty when filed under Section 89(4) of the said Act;’

# 29. In accordance with the position of law clarified by the Supreme Court in paragraph No.20 of the said judgement in the case of State of Punjab and another vs. Ferrous Alloy Forgings P. Ltd. and others (supra), exemption from payment of stamp duty on the sale certificate issued to the petitioner, will continue to apply, so long as the same remains as it is. It is only when the petitioner uses it for some other purpose, that the requirement of payment of stamp duty, will arise.

# 30. Writ petition is disposed of in above terms. Pending applications, if any, also stand disposed of.

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Savan Godiawala Vs. Insolvency and Bankruptcy Board of India - The liquidator can seek assistance of professionals for services which are not in his domain exclusively. Services such as claim verification, taking custody or control of assets, evaluating the assets, inviting and settling claims of creditors, etc. will fall in these services where the liquidator has the expertise and they do not fall in the domain of another professional.

 HC Delhi (2025.08.28) in Savan Godiawala Vs. Insolvency and Bankruptcy Board of India [2025:DHC:8086, W.P.(C) 4951/2024 & CM APPL. 35954/2024],held that;

• As per regulations, he can take help of professionals for discharge of his duties, however, those services should fall within the domain of a professional, for example, accounting professional, auditing professional, marketing professional, valuation professional, legal professional.

• The liquidator can seek assistance of professionals for services which are not in his domain exclusively. Services such as claim verification, taking custody or control of assets, evaluating the assets, inviting and settling claims of creditors, etc. will fall in these services where the liquidator has the expertise and they do not fall in the domain of another professional.

• A writ court exercising its jurisdiction under Article 226 of the Constitution of India does not substitute its own conclusion to the one arrived at by any authority unless the decision is so perverse that no authority can come to such a conclusion or that the order is completely in contravention of any provision of any law be it an Act or the Regulation framed under the Act.

• In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision.

• This Court being the guardian of fundamental rights Is duty-bound to Interfere when there Is arbitrariness, irrationality, mala fides, and bias However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review In contractual or commercial matters

• From the afore-stated judgment, it is clear that the scope of interference by way of judicial review in commercial matters is extremely limited and can only be justified when a case of arbitrariness, unreasonableness, mala fide, bias, or irrationality is clearly made out.

•  Similarly, it is also the function of a Liquidator of the company, where revival is not possible, to ensure that the assets of the company are not frittered away which are meant to repay the Government dues, the wages of the employees, who have not been paid, and the other dues.

• The Insolvency Professional itself cannot become a predator of a company which itself is in the dire financial strains. Such professionals who act more like scavengers of a dead body for their own ulterior motives have to be dealt with severely as they strike at the heart rather the very object of the IBC.

• The Resolution Professional is therefore obliged to maintain the highest standard of professional ethics and even a single act of negligence, omission, or commission is sufficient for the Board to take action against the Resolution Professional/ Liquidator under Section 217-220 of the IBC after following the due procedure.

Excerpts of the Order;

# 5. Heard the Counsels for the parties and perused the material on record. 

# 6. The scope of judicial review over the decisions taken by quasijudicial bodies or administrative bodies is well settled. Under Article 226 of the Constitution of India, the enquiry is limited to two questions: 

• (i) whether the decision making process is just, fair and reasonable and in accordance with the rules laid down by the authorities for conducting the enquiry, 

• (ii) whether the order is so perverse that no reasonable person would arrive at the decision taken by the authorities, i.e., it suffers from the vice of Wednesbury‘s Principles.

# 7. As stated in the foregoing paragraphs, against the Order dated 18.08.2022 passed by the Respondent, the Petitioner approached this Court by filing W.P.(C) 13317/2022, contending that copy of the final inspection report had not been supplied to him. Since the process adopted by the Disciplinary Authority was contrary to the rules, this Court set aside the said Order dated 18.08.2022 and remanded the matter back to the Respondent to give a copy of the final inspection report to the Petitioner, invite replies, and thereafter pass a reasoned order after considering the reply. 

# 8. In compliance of the said Order, the Petitioner was supplied with the Final Inspection Report, and additionally an Addendum to the Draft Inspection Report, to ensure full disclosure of all the material. The Petitioner submitted his substituted response to the SCN and was even afforded personal hearings for proper adjudication. The Petitioner cannot raise an objection that the Addendum to DIR was suppressed by the Respondent as it is only after the supply of the said Addendum that the personal hearings took  place on 19.02.2024 and 27.02.2024, which resulted in the final adjudication and passing of the Impugned Order.

# 9. Therefore, it is only after due compliance of the Order of this Court, and providing the Petitioner with a proper opportunity of being heard, the Impugned Order was passed. In light of the same, this Court is of the opinion that there was no infirmity in passing of the Impugned Order. 

# 10. Further, the Respondent in exercise of powers under Section 196 of the Code read with Regulation 3(1) & 3(3) of the Inspection Regulations, passed the Order dated 12.10.2020 ("Inspection Order"), directing the IA to conduct inspection of the Petitioner in relation to all his IBC related assignments. After the Inspection Order was passed by the IBBI directing IA

to conduct inspection, and before commencing such inspection, the Petitioner was duly notified by the IA vide email dated 13.10.2020 under Regulation 4(1) that it will be undertaking Petitioner's inspection.

# 11. Perusal of Regulation 11(2) of the Inspection Regulations provides as follows:

• “11. Consideration of Report.

• (1) The Board shall consider the inspection report received under regulation 6 or investigation report received under regulation 10, as the case may be, expeditiously.

• (2) If the Board, after consideration of the report under sub-regulation (1)10 [or on the basis of material otherwise available on record], is of the prima facie opinion that sufficient cause exists to take actions under section 220 or sub-section (2) of section 236, it shall issue a show-cause notice in accordance with regulation 12 to the service provider or an associated person and in any other case, close the inspection or investigation, as the case may be.

# 12. It is clear from the perusal of Regulation 11(2) of the Inspection Regulations that the Respondent after consideration of the report, can issue a Show Cause Notice if it is of the prima facie opinion that sufficient cause exists to take action under Section 220 of the Code.

# 13. Taking into account the above-mentioned Regulations, this Court holds that the Respondent had followed the due process and has not committed any infirmity in the initiation of the disciplinary proceedings.

14. It is the case of the Petitioner that the Inspection Order was issued by Assistant General Manger instead of requisite/competent authority, i.e., the Executive Director, IBBI as per the Delegation Order.

# 15. As per clause 3(3) of the said Delegation Order when a Division does not have an Officer of a particular grade, the powers and functions delegated to him under this Order may be exercised by an Officer of the next immediate lower Grade, if so designated by the Chairperson. The relevant extract is the Delegation Order is as follows:

• 3. (1) The delegation of powers and functions in this Order is in addition to, and not in derogation of, delegation of powers and functions assigned under the Code or rules or regulations made under the Code. 

• (2) The powers and functions delegated to any Member or Officer of the Board under this Order may be exercised by an Officer or Authority higher in grade or position to him in reporting hierarchy. 

• (3) Where a Division does not have an Officer of a particular grade, the powers and functions delegated to him under this Order may be exercised by an Officer of the next immediate lower Grade, if so designated by the Chairperson. 

• (4) Subject to provisions in this Order, the Chairperson may delegate any powers and or functions to a Member or an Officer by a special order from time to time. (emphasis supplied)

# 16. The inspection of the Petitioner was approved by Competent Authority and only the communication was made by AGM after seeking approval under Clause 3(3) of the Delegation Order vide File Note dated 16.09.2019. The relevant extract is as follows:

• “Subject: Approval for Delegation of Power to AGM (MM)

• 1. Vide officer order IBBI/HR/60 dated 19.08.2019, Mr.Mayank Mehta, Assistant General Manager was designated as divisional head IP Monitoring Division (issuance of Show Cause Notices).

• 2. In terms of Sr. No.12 (Supervision of Service Providers) of Part B or the IBBI General Order (Delegation of Powers and Functions) IBBI/DOP/2017 dated 25.04.2018, the power for issue of Show-Cause Notice has been delegated to Deputy General Manager (DGM).

• 3. It is also stipulated at clause 3 (3) of Part-A of the IBBI General Order (Delegation of Powers and Functions) IBBI/DOP/2017 dated 25.04.2018 that where a Division does not have an Officer of a particular grade, the powers and functions delegated to him under this Order may be exercised by an Officer of the next immediate lower grade, if so designated by the Chairperson.

• 4. In view of the above, Mr. Mayank Mehta. Assistant General Manager (of IP Monitoring Division may be authorised for issuance of Show Cause Notices.

• 5. Submitted for approval, please.

# 17. The AGM issued the Inspection Order as in accordance with the Delegation Order as the AGM was duly authorised by the Competent Authority in consonance with the procedure laid down in the Delegation Order. Thus, we do not find any merit in the submission of the Petitioner that the Inspection Order was issued by AGM instead of Executive Director without requisite authority. Hence, this Court does not find merit with the plea of the Petitioner. No procedural irregularity was committed by the Respondent during the disciplinary proceedings. 

# 18. After holding that there is no procedural irregularity in the Impugned Order, this Court now proceeds to consider the second aspect as to whether the Order of the DC is so perverse that it shocks the conscience of the Court, as to whether it is based on irrelevant considerations or, if there is a failure to take into account the material factors.

# 19. The Petitioner was first appointed as RP of Lanco and since the CIRP failed, the Petitioner was appointed as Liquidator in Lanco as well. 

# 20. The Petitioner was the appointed liquidator for Lanco and the RP for SPPL. The Respondent has held the Petitioner for the following contraventions:

• a. In the matter of Lanco, the withdrawal of excess remuneration as Liquidator‟s fee.

• b. Petitioner engaged a related party (DTTILLP) to assist him in the liquidation process of Lanco, on completely vague terms and conditions, for the function falling in domain of the Liquidator for which Liquidator is paid fee as per table under Regulation 4 of Liquidation Regulations, and without approval of CoC.

• c. In the matter of SPPL, the failure of Petitioner to file avoidance application in contravention of Regulation 35A of the CIRP Regulations.

# 21. This Court is going to first deal with the arguments of the Petitioner against the findings of the DC in the Impugned Order with respect to Lanco; and subsequently with the findings of the Impugned Order with respect to SPPL. Arguments with respect to Lanco:

# 22. The Petitioner seeks to assail the finding in the Impugned Order with regards to excessive fee withdrawal from the liquidation estate of Lanco. As per the Petitioner, during the period from 27.02.2019 to 27.08.2019, due to erroneous calculation of Liquidator‟s fee, the Petitioner withdrew excess fee of Rs. 83,04,764/- from the liquidation estate of the Corporate Debtor, which was, over and above the fee that was payable to the Petitioner.

# 23. The Petitioner refunded the excess amount of Rs. 92,44,758/-, adjusted for taxes, after the Respondent had brought this fact to his notice and had taken cognizance of such infraction. The Petitioner claims that it was a bona fide mistake on account of erroneous interpretation of Regulation 4 of the Liquidation Regulations. The relevant extract of Regulation 4 is as follows: 

• 4. Liquidator‘s fee.

• (1) The fee payable to the liquidator shall be in accordance with the decision taken by the committee of creditors under regulation 39D of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 

• (2) In cases other than those covered under subregulation (1), the liquidator shall be entitled to a fee- 

• (a) at the same rate as the resolution professional was entitled to during the corporate insolvency resolution process, for the period of compromise or arrangement under section230 of the Companies Act, 2013 (18 of 2013); and

• (b) as a percentage of the amount realised net of other liquidation costs, and of the amount distributed, for the balance period of liquidation, as under: . . . . 

• (3) Where the fee is payable under clause (b) of subregulation (2), the liquidator shall been titled to receive half of the fee payable on realisation only after such realised amount is distributed.

• Clarification: Regulation 4 of these regulations, as it stood before the commencement of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations,2019 shall continue to be applicable in relation to the liquidation processes already commenced before the coming into force of the said amendment Regulations.

# 24. Section 36 of the Code stipulates that the liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors. Relevant extract of Section 36 is as follows: . . . . 

# 25. Moreover, as per Section 208(2)(a) of the Code, an IP is bound to abide by the Code of Conduct and to take reasonable care and diligence while performing his duties. The relevant extract of Section 208 of the Code is as follows: . . . 

# 26. The Petitioner was bound to follow the provisions of the Code, and the Code of Conduct laid down under the Code in letter and spirit as it is the duty of the IP to maximise the value of liquidation estate in order to pay back the creditors.

# 27. The Petitioner has placed reliance on the Circular dated 28.09.2023 to contend that as per the said Circular once the IP returns the excess fee not disciplinary action can be taken against such IP.

# 28. It is pertinent to note that the return of excess fee by the Petitioner only occurred after the Respondent had brought this fact to the Petitioner‟s notice and had taken cognizance of such infraction. The act of the Petitioner refunding the excess fee only after the said contravention was pointed out by the Respondent does not absolve the Petitioner rather it points out to the culpability of the Petitioner. In the present case, the Petitioner failed to substantiate how the erroneous interpretation of Regulation 4 of the Liquidation Regulations led to withdrawal of an excess fee. This fact is against the intent and spirit of the Code and its regulations. The Petitioner cannot be given the protection of Section 233 of the Code as the Petitioner has utterly failed to establish how his actions were done in good faith.

# 29. Further, the orders passed by the DC in similar cases which were relied upon by the Petitioner cannot be taken as precedent as they were passed in entirely different facts and circumstances. Therefore, we do not see any reason to interfere with the finding of the DC in the Impugned Order.

# 30. The Petitioner has also contended the finding of the DC in the Impugned Order upholding the charge in the SCN that the Petitioner had engaged DTTILLP on vague terms and conditions and paid unjustified fees without any documentation and quantification. The DC held that for carrying out his own duties, the Petitioner engaged assistance of DTTILLP which was not in the nature of appointment of professionals under Regulation 7(1) of the Liquidation Regulations. Instead, DTTILLP was paid the fees for the work for which the Petitioner was duly compensated as per Regulation 4(3) of the Liquidation Regulations. The relevant extract of the said regulation of the Liquidation Regulations is provided hereunder:-  . . . 

# 31. As per the Petitioner, DTTILLP was appointed by the Petitioner under Regulation 7(1) of the Liquidation Regulations, which provides as follows:

• “7. Appointment of professionals.

• (1) A liquidator may appoint professionals to assist him in the discharge of his duties, obligations and functions for a reasonable remuneration and such remuneration shall form part of the liquidation cost.”

# 32. The DC in the Impugned Order has provided a table for the work done by the DTTILLP as submitted by the Petitioner. The relevant extract of the Impugned Order is as follows:

• “3.3.46. The work done by the DTTILLP as submitted by Mr. Savan Godiawala is below: . . . . .

# 33. From the perusal of the above, it can be construed that the most of the activities contained by DTTILLP correspond to the role and functions of a liquidator as provided under provisions of the Code and Liquidation Regulations. Section 35 of the Code enumerates the powers and duties of a liquidator. The relevant extract of Section 35 of the Code is as follows

• “35. Powers and duties of liquidator.—

• (1) Subject to the directions of the Adjudicating Authority, the liquidator shall have the following powers and duties, namely:—

• (a) to verify claims of all the creditors; 

• (b) to take into his custody or control all the assets, property, effects and actionable claims of the corporate debtor;

• (c) to evaluate the assets and property of the corporate debtor in the manner as may be specified by the Board and prepare a report;

• (d) to take such measures to protect and preserve the assets and properties of the corporate debtor as he considers necessary;

• (e) to carry on the business of the corporate debtor for its beneficial liquidation as he considers necessary;

• (f) subject to section 52, to sell the immovable and movable property and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels in such manner as may be specified; 1

• [Provided that the liquidator shall not sell the immovable and movable property or actionable claims of the corporate debtor in liquidation to any person who is not eligible to be a resolution applicant.].

• (g) to draw, accept, make and endorse any negotiable instruments including bill of exchange, hundi or promissory note in the name and on behalf of the corporate debtor, with the same effect with respect to the liability as if such instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of its business; 

• (h) to take out, in his official name, letter of administration to any deceased contributory and to do in his official name any other act necessary for obtaining payment of any money due and payable from a contributory or his estate which cannot be ordinarily done in the name of the corporate debtor, and in all such cases, the money due and payable shall, for the purpose of enabling the liquidator to take out the letter of administration or recover the money, be deemed to be due to the liquidator himself;

• (i) to obtain any professional assistance from any person or appoint any professional, in discharge of his duties, obligations and responsibilities;

• (j) to invite and settle claims of creditors and claimants and distribute proceeds in accordance with the provisions of this Code;

• (k) to institute or defend any suit, prosecution or other legal proceedings, civil or criminal, in the name of on behalf of the corporate debtor;

• (l) to investigate the financial affairs of the corporate debtor to determine undervalued or preferential transactions; 

• (m) to take all such actions, steps, or to sign, execute and verify any paper, deed, receipt document, application, petition, affidavit, bond or instrument and for such purpose to use the common seal, if any, as may be necessary for liquidation, distribution of assets and in discharge of his duties and obligations and functions as Liquidator; 

• (n) to apply to the Adjudicating Authority for such orders or directions as may be necessary for the liquidation of the corporate debtor and to report the progress of the liquidation process in a manner as may be specified by the Board; and

• (o) to perform such other functions as may be specified by the Board.

• (2) The liquidator shall have the power to consult any of the stakeholders entitled to a distribution of proceeds under section 53: 

• Provided that any such consultation shall not be binding on the liquidator: 

• Provided further that the records of any such consultation shall be made available to all other stakeholders not so consulted, in a manner specified by the Board.”

# 34. The work done by DTTILLP is similar to that of a liquidator for which fee was already being paid to the Petitioner who was the appointed Liquidator.

# 35. As per Liquidation Regulations, a liquidator can engage services of professionals to assist him in discharge of his duties, obligations and functions. As per regulations, he can take help of professionals for discharge of his duties, however, those services should fall within the domain of a professional, for example, accounting professional, auditing professional, marketing professional, valuation professional, legal professional. The liquidator can seek assistance of professionals for services which are not in his domain exclusively. Services such as claim verification, taking custody or control of assets, evaluating the assets, inviting and settling claims of creditors, etc. will fall in these services where the liquidator has the expertise and they do not fall in the domain of another professional.

# 36. The fee of a Liquidator can be fixed in two ways. Either the Liquidator can negotiate the fee with the CoC and get it fixed as per his terms and conditions; or the same can be fixed as per Regulation 4(3) of the Liquidation Regulations. Once, it is fixed as per Regulation 4(3), the fee is for all the role and functions of the liquidator which are performed by the liquidator when the liquidator is for a small case. But in a complicated case like the current one, the performance of all such duties will require a team and, the fees will accordingly be higher.

# 37. The DC in the Impugned Order, has rightly held that the fee paid to DTTILLP to the extent they have been paid for performing the role and functions of liquidator cannot be said to be reasonable which cannot be said to be perverse.

# 38. The Petitioner also contended that the findings in the Impugned Order regarding the Petitioner appointing DTTILLP to perform the function of the Liquidator was not part of the SCN.

# 39. During the Disciplinary Proceeding, the Petitioner himself admitted to the scope of work of DTTILLP. The relevant portion of the Impugned Order is as follows:

• "3.3.20. Mr. Savan Godiawala submitted that the assistance required from DTTILLP, immediately upon the commencement of the liquidation in various processes, included the following:

• a. Claim verification;

• b. Planning and strategy for the auction of the Corporate Debtor, businesses, and assets; 

• c. Preparation of liquidation estate and preparation for auction – data collation from various sites, review of assets and their categorization for first auction;

• d. Coordination and facilitation of valuation of assets; 

• e. Preparation of reports such as preliminary report, asset memorandum, marketing documents, etc.; 

• f. Interactions with the stakeholders, including through conduct of stakeholders‘ meetings;

• g. Preparation of process documents for auction of the Corporate Debtor, businesses, and assets;

• h. Appointment of auction agency;

• i. Discussion and planning the details of auction process with appointed auction agency;

• j. Initial marketing thrust and reach out to potential buyers;

• k. Extensive deliberation with stakeholders on the possible monetization of group entities for the benefit of stakeholders, whether as part of liquidation or outside liquidation process;

• l. Discussions with SAIL and various stakeholders and efforts towards realizing value from a coal mining contract of CD-1;

• m. Identifying EPC projects and potential receivables for recovery."

# 40. From the material on record, it is evident that it was only after the aforesaid submissions were made on behalf of the Petitioner that the Disciplinary Committee proceeded to conclude that DTTILLP has been paid an enormous fee for tasks which, under the statutory scheme, were required to be performed by the Liquidator himself, and for which he was already in receipt of due remuneration. The DTTILLP has thus been paid an excessive fee, in clear contravention of the Liquidation Regulations.

# 41. Therefore, this Court does not find any infirmity with the aforestated findings of the DC in the Impugned Order with respect to contraventions committed by the Petitioner during the liquidation of Lanco and declines to interfere with the said findings. Arguments with respect to SPPL:

# 42. The Petitioner was appointed as RP of the SPPL which finally went into liquidation since the CIRP failed.

# 43. This Court will now analyse arguments of the Petitioner in consonance with the facts of the matter in the case of SPPL. The Petitioner has objected to the finding in the Impugned Order pertaining to delayed filing of Avoidance Application in contravention to Regulation 35A of the CIRP Regulations.

#  44. The DC in the Impugned Order has held that the Petitioner appointed BDO India LLP vide engagement letter dated 01.07.2020 to conduct TRA of SPPL. However, he failed to initiate action as required under Regulation 35A(2) and 35A(3) of CIRP Regulations.

# 45. It is the case of the Petitioner that such delay occurred due to onset of Covid-19 pandemic as the management of SPPL was working on limited staff and therefore there was a delay in supply of information sought by BDO for the purposes of TRA and consequential delay in filing of the Avoidance Application. It is contended that on account of the pandemic the Respondent itself, the NCLAT, and even the Supreme Court relaxed timelines under CIRP regulations, the IBC Code, and the Limitation Act respectively.

# 46. The Petitioner in the 6th meeting of the CoC held on 22.10.2020 with respect to SPPL, himself admitted that the transaction audit is completed. The relevant portion of the meeting dated 22.10.2020 is provided hereunder:

• Agenda 5: To update CoC on Corporate Insolvency Resolution Process (“CIRP”) activities undertaken by the Resolution Professional (“RP”) and to brief the CoC about the current state of operation and recent developments The Chair further in line with agenda briefed the CoC on activities undertaken by the RP/Authorised Representatives:

• As discussed, in the fifth CoC meeting, final list of Prospective Resolution Applicants(PRAs) include:

• Vedanta Limited 

• Manikaran Power Limited 

• Sherisha Technologies Private Limited

• Prudent ARC Limited

• RP informed the CoC members that the PRAs were given access to the Virtual Data Roomand have devoted resources for their due diligence; however, none of the PRAs have submitted a Resolution Plan up to the due date.

• The RP and his team are in continuous interaction with the plant in-charge Mr. Manojit Panda as well as the security in-charge Mr. Sagar Patil to keep a check on the current situation at the plant. 

• The RP and his team are in continuous follow-up with the Transaction Review Auditors and valuers for completion of the audit as well as valuation exercise. Transaction audit is near to completion and valuation exercise will be completed within 5-7 days. He further briefed the CoC that the transaction audit is completed and a discussion call is scheduled tomorrow. (emphasis supplied)

# 47. Inspite of the stand of the Petitioner in the 6th CoC meeting, the Petitioner in the disciplinary proceedings has taken the defence of delay on the part of the management of the SPPL in providing requisite information for the TRA which led to a delay in TRA, and the filing of Avoidance Application. The DC in its Impugned Order has held that the Petitioner could have filed an application under Section 19(2) of the Code for seeking cooperation of the management of SPPL when there was a continuous delay in receiving information. The Petitioner failed to do so, and even stopped following up with the management of SPPL from 21.12.2020.

# 48. The only reason, non-filing of the application under Section 19(2) as well as the Petitioner not following up with the management of SPPL, was made part of the Impugned Order was on account of the submissions made by the Petitioner in the disciplinary proceedings. This Court does not find any infirmity in the findings of the Impugned Order.

# 49. The Apex Court in Central Council for Research in Ayurvedic Sciences & Anr. v. Bikartan Das &Ors., 2023 SCC OnLine SC 996, has held as under:

• “48. Before we close this matter, we would like to observe something important in the aforesaid context: Two cardinal principles of law governing exercise of extraordinary jurisdiction under Article 226 of the Constitution more particularly when it comes to issue of writ of certiorari.

• 49. The first cardinal principle of law that governs the exercise of extraordinary jurisdiction under Article 226 of the Constitution, more particularly when it comes to the issue of a writ of certiorari is that in granting such a writ, the High Court does not exercise the powers of the Appellate Tribunal. It does not review or reweigh the evidence upon which the determination of the inferior tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substitute its own views for those of the inferior tribunal. The writ of certiorari can be issued if an error of law is apparent on the face of the record. A writ of certiorari, being a high prerogative writ, should not be issued on mere asking. 

• 50. The second cardinal principle of exercise of extraordinary jurisdiction under Article 226 of the Constitution is that in a given case, even if some action or order challenged in the writ petition is found to be illegal and invalid, the High Court while exercising its extraordinary jurisdiction thereunder can refuse to upset it with a view to doing substantial justice between the parties. Article 226 of the Constitution grants an extraordinary remedy, which is essentially discretionary, although founded on legal injury. It is perfectly open for the writ court, exercising this flexible power to pass such orders as public interest dictates & equity projects. The legal formulations cannot be enforced divorced from the realities of the fact situation of the case. While administering law, it is to be tempered with equity and if the equitable situation demands after setting right the legal formulations, not to take it to the logical end, the High Court would be failing in its duty if it does not notice equitable consideration and mould the final order in exercise of its extraordinary jurisdiction. Any other approach would render the High Court a normal court of appeal which it is not. 

• 51. The essential features of a writ of certiorari, including a brief history, have been very exhaustively explained by B.K. Mukherjea, J. in T.C. Basappa v. T. Nagappa [T.C. Basappa v. T. Nagappa, (1954) 1 SCC 905 : AIR 1954 SC 440] . The Court held that a writ in the nature of certiorari could be issued in ―all appropriate cases and in appropriate manner‖ so long as the broad and fundamental principles were kept in mind. Those principles were delineated as follows : (SCC p. 914, paras 8-10)

• 8. … In granting a writ of ―certiorari‖, the superior court does not exercise the powers of an Appellate Tribunal. It does not review or reweigh the evidence upon which the determination of the inferior tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substitute its own views for those of the inferior tribunal. …

• 9. The supervision of the superior court exercised through writs of ―certiorari‖ goes on two points, as has been expressed by Lord Summer in R. v. Nat Bell Liquors Ltd. [R. v. Nat Bell Liquors Ltd., (1922) 2 AC 128 (PC)] , AC at p. 156. One is the area of inferior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of law in the course of its exercise. … 

• 10. ―Certiorari‖ may and is generally granted when a court has acted without or in excess of its jurisdiction.‖

• 52. Relying on T.C. Basappa [T.C. Basappa v. T. Nagappa, (1954) 1 SCC 905 : AIR 1954 SC 440] , the Constitution Bench of this Court in Hari Vishnu Kamath [Hari Vishnu Kamath v. Ahmad Ishaque, (1954) 2 SCC 881 : AIR 1955 SC 233] , laid down the following propositions as well established : (Hari Vishnu Kamath case [Hari Vishnu Kamath v. Ahmad Ishaque, (1954) 2 SCC 881 : AIR 1955 SC 233] , SCC p. 899, para 24) 

• “24. … 24.1. “Certiorari” will be issued for correcting errors of jurisdiction, as when an inferior court or tribunal acts without jurisdiction or in excess of it, or fails to exercise it.

• 24.2. “Certiorari” will also be issued when the court or tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice.

• 24.3. The court issuing a writ of “certiorari” acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this isthat the court will not review findings of fact reached by the inferior court or tribunal, even if they be erroneous.”

• 53. This Court explained that a court which has jurisdiction over a subject-matter has jurisdiction to decide wrong as well as right, and when the legislature does not choose to confer a right of appeal against that  decision, it would be defeating its purpose and policy if a superior court were to rehear the case on the evidence and substitute its own finding in certiorari.

• 54. In Yakoob v. K.S.Radhakrishnan [Yakoob v. K.S . Radhakrishnan, 1963 SCC OnLine SC 24 : AIR 1964 SC 477] , P.B. Gajendragadkar, C.J., speaking for the Constitution Bench, placed the matter beyond any position of doubt by holding that a writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals. The observations of this Court in para 7 are worth taking note of : (SCC OnLine SC para 7)

• “7. The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Article 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate court. This limitation necessarily means that findings of fact reached by the inferior court or Tribunal as a result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ court. It is within these limits that the jurisdiction conferred on the High Courts underArticle 226 to issue a writ of certiorari can be legitimately exercised….”

• 55. In Surya Dev Rai v. Ram Chander Rai [Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675] , a Bench of two Judges held that the certiorari jurisdiction though available, should not be exercised as a matter of course. The High Court would be justified in refusing the writ of certiorari if no failure of justice had been occasioned. In exercising the certiorari jurisdiction, the procedure ordinarily followed by the High Court is to command the inferior court or tribunal to certify its record or proceedings to the High Court for its inspection so as to enable the High Court to determine, whether on the face of the record the inferior court has committed any of the errors as explained by this Court in Hari Vishnu Kamath v. Ahmad Ishaque [Hari Vishnu Kamath v. Ahmad Ishaque, (1954) 2 SCC 881 : AIR 1955 SC 233] occasioning failure of justice.‖ (emphasis supplied)

# 50. It is well settled that the High Court while exercising its jurisdiction under Article 226 of the Constitution of India does not sit as an Appellate Authority. A writ court exercising its jurisdiction under Article 226 of the Constitution of India does not substitute its own conclusion to the one arrived at by any authority unless the decision is so perverse that no authority can come to such a conclusion or that the order is completely in contravention of any provision of any law be it an Act or the Regulation framed under the Act.

# 51. The scope of interference by Court exercising its powers of judicial review in respect of a challenge pertaining to a decision taken by the experts of the field is well settled. The Supreme Court has considerably in a number of judgments held that the Court may interfere in an administrative decision, if and only if the same is arbitrary, irrational, unreasonable, mala fide, or biased. The Apex Court in Tata Cellular vs. Union of India,(1994) 6 SCC 651, has laid down as follows: 

• “70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.”

# 52. Summing up the principles laid down in Tata Cellular (supra), Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, DwarkadasMarfatia and Sons v. Board of Trustees of the Port of Bombay, (1989) 3 SCC 293, and Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622, the Apex Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, stated: 

• “13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision.

# 53. The Apex Court in Silppi Constructions Contractors v. Union of India, (2020)16 SCC 489, has laid down that Courts should exercise a lot  of restraint while exercising powers of judicial review in respect of matters pertaining to technical issues as the Courts lack the expertise to adjudicate upon technical issues. The relevant portion of the Judgment is reproduced as under:

• “19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such  interference will cause unnecessary loss to the public exchequer. (emphasis supplied)

# 54. The rationale in the afore-stated judgement was reaffirmed by the Apex Court in Tata Motors Limited vs. Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and Ors. (2023) 19 SCC 1. Further, the Apex Court in BTL EPC Ltd. vs. Macawber Beekay Pvt. Ltd. and Ors.2023 SCC OnLine SC 1223, also followed the law laid down by Silppi (supra), and Tata Motors (supra) stating as follows:

• “35. It is settled law that in contracts involving complex technical issues, the Court should exercise restraint in exercising the power of judicial review. Even if a party to the contract is ‘State‘ within the meaning of Article 12 of the Constitution, and as such, is amenable to the writ jurisdiction of the High Court or the Supreme Court, the Court should not readily interfere in commercial or contractual matters. This principle has been reiterated in a recent judgment of this Court. Justice J B Pardiwala, speaking for the Bench in Tata Motors Limited v. BEST held:

• 48. This Court being the guardian of fundamental rights Is duty-bound to Interfere when there Is arbitrariness, irrationality, mala fides, and bias However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review In contractual or commercial matters This Court Is normally loathe to Interfere In contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or Irrationality Is made out One must remember that today many public sector undertakings compete with the private industry The contracts entered Into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless Interference in commercial matters can cause. In contracts Involving technical issues the courts should be even more reluctant because most of us in Judges‘ robes do not have the necessary expertise to adjudicate upon technical Issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give fair play In the Joints‘ to the government and public sector undertakings In matters of contract. Courts must also not Interfere where such interference will cause unnecessary loss to the public exchequer.‖

• 36. The Court ought to defer to the discretion of the tender inviting authority which, by reason of having authored the tender documents, is best placed to interpret their terms. The Courts ought not to sit as courts of appeal but review the decision-making process and examine arbitrariness or mala fides, if any.”

# 55. From the afore-stated judgment, it is clear that the scope of interference by way of judicial review in commercial matters is extremely limited and can only be justified when a case of arbitrariness, unreasonableness, mala fide, bias, or irrationality is clearly made out. Further, the Courts lack the requisite expertise to adjudicate upon technical issues which are often involved in commercial matters. Applying the law laid down by the Apex Court to the facts of the present case, this Court is of the opinion that the IBBI has not contravened any of the procedural requirements mandated under the IBC or the Inspection Regulations.

# 56. The purpose of the IBC is revival of a company. A Resolution Professional takes complete charge of the company when the company is undergoing through resolution process. His role is to see whether the company can be revived or not. The function of IRP is to ensure that proper steps are taken to set aside such of transactions which are fraudulent in nature. Similarly, it is also the function of a Liquidator of the company, where revival is not possible, to ensure that the assets of the company are not frittered away which are meant to repay the Government dues, the wages of the employees, who have not been paid, and the other dues. The Insolvency Professional itself cannot become a predator of a company which itself is in the dire financial strains. Such professionals who act more like scavengers of a dead body for their own ulterior motives have to be dealt with severely as they strike at the heart rather the very object of the IBC. The Resolution Professional is therefore obliged to maintain the highest standard of professional ethics and even a single act of negligence, omission, or commission is sufficient for the Board to take action against the Resolution Professional/ Liquidator under Section 217-220 of the IBC after following the due procedure. The purpose of the IBBI is to look into the conduct of the Resolution Professional in the nature and manner of the performance of their duty.

# 57. The conduct of the Petitioner has been first scrutinized by the Investigating Authority which found substantial deficiencies in the conduct and performance of the Petitioner inasmuch the Petitioner failed to maximise the returns to the creditors by withdrawing excessive fee from the Liquidation estate of Lanco, hiring of external agency and allowing them huge fees for the tasks that were supposed to be done by the Petitioner himself, and delaying the filing of avoidance application in the case of SPPL.

# 58. The facts of the case does indicate a lack of devotion on the part of the Petitioner in not filing the avoidance application in the case of SPPL and engaging an entity in which he was a partner to perform functions which the Petitioner could have undertaken himself and thereby, saving substantial amount of money that has to be paid. It is well settled that Courts, while exercising their writ jurisdiction, only look at the decision making process and not the decision itself. Even while interfering with penalties, the Courts do not interfere with penalties, unless it shocks the conscience of the Courts. Further the argument that persons who are similarly situated have been dealt with leniently becomes a facet of a negative equality and Article 14 does not apply in these cases. The Petitioner cannot take the umbrella that other persons in similar cases have been dealt with lightly. In any event, the Respondents have brought out a case that the cases are not similar in nature and the Petitioner was handling much bigger projects as compared to other Insolvency Professionals.

# 59. The Impugned Order of the Disciplinary Committee shows that all the objections of the Petitioner were duly considered after affording the Petitioner with personal hearings. This Court has gone through the material on record and is of the opinion that the procedure under law has been followed by the Respondent before passing the Impugned Order suspending the Petitioner, and directing the refund of half of the fees paid to DTTILLP. The attempt of the Petitioner has been to persuade this Court to substitute its conclusion to the one arrived at by the Board, which is outside the scope of Article 226 of the Constitution of India.

# 60. This Court, therefore, does not find any reason to interfere with the Order passed by the Respondent.

# 61. Accordingly, the Petition is dismissed, along with the pending applications, if any.

# 62. The IBBI by the Impugned Order has directed the Petitioner to deposit half of the fees paid to the DTTILLP with the Consolidated Fund of India. However, this Court vide Order dated 22.05.2024 has stayed the recovery of penalty from the Petitioner. The time to deposit the penalty by the Petitioner is extended by six weeks.

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