### Exclusion of medical leave and auction delay for liquidator’s fee calculation under IBBI Regulations is impermissible.

The Appellant, the erstwhile Liquidator (formerly Resolution Professional), filed an application (IA No. 2848/2025) before the Adjudicating Authority (NCLT) seeking the release of outstanding fees amounting to Rs. 9,12,953.

The Adjudicating Authority, vide order dated 31.10.2025, determined that the Appellant had incorrectly calculated his fees based on the "first bucket" (early realization) by suo-moto excluding 495 days from the liquidation period.

The NCLT found that realization actually occurred after one year, placing the fee structure in the "third bucket" under the relevant regulations.

Consequently, the NCLT held that the Appellant had overdrawn fees and ordered a refund of Rs. 72,51,530 plus GST and interest.

The Appellant challenged this order, specifically seeking the exclusion of an additional 141 days under "Medical accident".

Whether the Appellant was entitled to exclude a period of 141 days (resumption of fresh auctions after medical accident) for the purpose of calculating the fee bucket under the Liquidation Regulations.

Whether the Adjudicating Authority erred in directing the refund of excess fees withdrawn by the Liquidator.

The court primarily applied Regulation 4(2) of the IBBI (Liquidation Process) Regulations, 2016, which mandates a tiered fee structure (buckets) for Liquidators based on the timeline of asset realization and distribution.

This regulation dictates that the percentage of the fee decreases as the time taken for realization increases (e.g., realization in the first six months vs. after one year).

The court also considered principles of "sufficient cause" for condonation of delay in re-filing appeals under the National Company Law Appellate Tribunal Rules.

The NCLAT observed that the Adjudicating Authority had already adopted a liberal approach by excluding 495 days, which included the COVID-19 mandatory lockdown and a 70-day medical exemption for the Liquidator.

Regarding the disputed 141-day period for "fresh auctions resumed," the Tribunal found no logical legal basis for such exclusion, noting that the "actual realization" by the Appellant occurred after one year regardless of when auctions were resumed.

The Tribunal affirmed the NCLT’s calculation, which demonstrated that the Appellant had charged Rs. 1,49,54,048 whereas he was only entitled to Rs. 76,92,336 under the "third bucket" (realization after one year).

The Tribunal concluded that since the realization fell into the third bucket, the excess amount withdrawn from the liquidation estate was rightfully ordered to be refunded to the Corporate Debtor’s account.

The Tribunal affirmed the direction that the Appellant is liable to refund Rs. 72,51,530 plus GST @ 18% (amounting to Rs. 13,05,275) within 30 days, failing which it shall carry interest @ 12% p.a.

The delay in re-filing the appeal was condoned.