Even though the Clause (1C) and (1D) of Schedule I to Liquidation Regulations is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes – S M Steels and Power Ltd. Vs. Pankaj Dhanuka Liquidator of Corporate Power Ltd. – NCLT Kolkata Bench
The Hon’ble NCLT Kolkata Bench held that the essence of Regulation 33(3) of the IBBI (Liquidation Process) Regulations is that in case a collusion exists it would lead to an under recovery of the assets of the Corporate Debtor which is against the primary purpose of the IBC, 2016. As can be made out from Regulations 33 Schedule I is 1C and 1D that even though the Schedule I is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes.