TMI Blog2020 (1) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... ntested that even though they have not replied to the Demand Notice within the specific period, it will not take away their right to take plea of 'existence of dispute' before the Adjudicating Authority - We agree with the stand taken by the Corporate Debtor that mere not giving a reply cannot take away their right to take a plea of 'existence of dispute'. Therefore, there is a clear existence of prior dispute regarding fee claimed by the applicant - answered in negative. Whether fee structure under Rule 6 of Rules Regarding Fee Payable to Advocates, framed by the High Court applicable to Original Application filed before a Tribunal? - HELD THAT:- The fee structure mentioned in Rule 6 (2) of the Rules Regarding Fee Payable to Advocates framed by High Court of Kerala for conducting money claims are applicable only to High Courts and Subordinate Courts and not to the Tribunals - answered in negative. The application filed by the Operational Creditor/applicant has fallen flat and cannot be proceeded further in this matter - Application rejected. - IBA/47/KOB/19 - - - Dated:- 10-1-2020 - Ashok Kumar Borah , Member ( J ) And Veera Brahma Rao Arekapudi , Membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/2016 (O.A No. 19/2010). 4. The counsel for the applicant stated that as per Rule 6 (2) (d) of the Rules regarding fee payable to Advocates framed by the High Court of Kerala with the previous approval of the Governor of Kerala, the fee of the lawyers for conducting money claims will be 5% of the value of the subject matter of the case. If the case is settled out of court, the fee for the lawyers will be of the 5% viz; 2.5%. This fee structure was communicated by the applicant to the Corporate Debtor as per letter dated 12.08.2010, 18.07.2014 and 12.08.2015. 5. The counsel further stated that after the conclusion of the O.A in the DRT, the applicant had forwarded the final bill dated 15.12.2017 for ₹ 4,19,20,000/- (Rupees Four Crore Nineteen Lakhs Twenty Thousand Only) after deducting ₹ 2,75,000/- already received as fee. Reminders dated 13.08.2018, 11.10.2018 06.02.2019 were sent to the Corporate Debtor, but no response was received. 6. The counsel for the applicant submitted that a communication dated 06.03.2019 was received from Corporate Debtor stating that Corporate Debtor is facing financial constraints and therefore requested the Operational Credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly cover High Courts and Subordinate Courts. Nowhere are Tribunals mentioned for its applicability. Further, the Law Commission in its 272nd Report has opined that: Tribunal' is an administrative body established for the purpose of discharging quasi-judicial duties. An Administrative Tribunal is neither a Court nor an executive body. It stands somewhere midway between a Court and an administrative body. Therefore, the applicant was wrong in contending that fee should be paid as a percentage fee as per the Rules Regarding Fees Payable to Advocates Act. 12. The counsel for the Corporate Debtor submitted that Rule 6 only applies to original suits, wherein they have to be filed under Civil Procedure Code, 1908, whereas the present case under DRT has been filed under the Securitisation and reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 . The Original Application filed under DRT are different from an Original suit under the Civil Court. Therefore, if a claim stating that the Rules Regarding Fees Payable to Advocates (as amended in 2012) is to be applied in the present petition for recovering the fees for alleged services, then Rule 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l sum of ₹ 288 Crores and that became possible after filing of Written Statement on advice by the applicant and also after filing the petition challenging the maintainability of the claim. Therefore, the applicant is entitled to get the fee as per the claim in the application which is legitimately due as per the rules issued by the High Court. 19. The counsel further submitted that applicant is clearly an Operational Creditor and absolutely no pre-existing dispute is there between the parties and claimed that Corporate Debtor admitted that they have not replied to the Demand Notice. 20. The counsel for the applicant stated that no bank will settle for less than half of the amount when there is sovereign guarantee to the loan and there are valuable assets for realising the entire principal amount plus interest. It was only because of the very valid legal contentions raised by the applicant as the counsel for the Corporate Debtor even as to the maintainability of bank's claim, the bank lost their vigour in obtaining a decree in short time and after 7 years they were compelled to settle this matter. 21. As regards to the contention that Rules Regarding Fee Payable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et been paid?; and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(5) of the Act. 26. We have examined the present application of Operational Creditor under the above three parameters laid down in the above judgement and framed the following issues for consideration: i. Whether is there any agreement/documentary evidence to prove the fees structure is agreed between Operational Creditor and Corporate Debtor? ii. Whether is there any pre-existing dispute between Operational Creditor and Corporate Debtor in regard to the present claim? iii. Whether fee structure under Rule 6 of Rules Regarding Fee Payable to Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18.07.2014. He also pursued the same by sending letters to the Corporate Debtor on various dates. However, there is no communication/reply from the Corporate Debtor agreeing for such a fee structure. The applicant herein, has also forwarded a copy of his claim dated 06.02.2019 to the Secretary to Government of Kerala industries (K) department, Government Secretariat, Thiruvananthapuram. 31. In the absence of a written agreement on fee structure between the parties, we have gone through the Advocate Fee being paid by Banks/ Financial institutions as decided by Indian Bank Association to their advocates for appearing in suits before DRT, which can be considered as benchmark for such cases. It shows that for matters before DRT, the fees payable is fixed at 1 % of the claim amount with a minimum of ₹ 12, 500/- and a maximum limit of ₹ 30,000/- per case. In metro cities, the maximum limit is ₹ 50,000/- per case. 32. We have also perused the appointment letter (CDC/PRL/P4/2017) dated 24.05.2017 issued by Corporate Debtor to V.J. Mathew, designated Senior Advocate of High Court, Kerala, who is acting as the current standing counsel of KSCDC, which shows the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evel meeting convened by Hon'ble Chief Minister of Kerala and the banks had agreed to such a settlement considering the plight of KSCDC, indirectly hinting that the outcome is not because of the efforts of the applicant. 37. As regards the claim of the applicant that the Corporate Debtor has not replied to the claim as per Section 8 of I B Code and the Corporate Debtor lost his right to raise a dispute now may not stand to reason as decided by the Hon'ble NCLAT in Drulum India Pvt. Ltd. V. Sharma Kalypso Pvt. Ltd, MANU/NL/0144/2018, wherein it is clearly stated as under: the Adjudicating Authority came to a definite conclusion that there is 'existence of dispute' and refused to admit the application under Section 9 of the I B Code, while we have noticed the plea taken by the appellant that no reply pursuant to demand notice was given by the 'Corporate Debtor', but that will not take away the right of 'Corporate Debtor' to take plea of 'existence of dispute' before the Adjudicating Authority at the time of admission of application under Section 9 of the I B Code. As such, the Corporate Debtor contested that even though they ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd so will not apply to Tribunals, as such. It is only by way of analogy and rule of guidance the provisions of the said rules are perhaps referred to and relied on broadly for the purpose of awarding advocate's fee by the Tribunals. It is not, as if, the said rules are binding for awarding the fees in proceedings before Tribunals. It should be remembered that the award of costs is fully discretionary. ii. Union of India v. R. Gandhi and Ors., 2010 (261) ELT 3 (S.C.) produced by the Corporate Debtor clearly distinguished between Courts and Tribunals, which quoted as follows: 14. Though both Courts and Tribunals exercise judicial power and discharge similar functions, there are certain well-recognised differences between courts and Tribunals. They are : (i) Courts are established by the State and are entrusted with the State's inherent judicial power for administration of justice in general. Tribunals are established under a statute to adjudicate upon disputes arising under the said statute, or disputes of a specified nature. Therefore, all courts are Tribunals. But all Tribunals are not courts. On a cursory perusal of the above judgements, we came to a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
