The Bombay High Court upheld the Insolvency and Bankruptcy Board of India (IBBI) regulation allowing a 0.25% regulatory fee on realisable value to creditors during corporate insolvency resolution processes (CIRP), reinforcing the Board's regulatory authority.
Bombay HC Confirms IBBI's Regulatory Fee on Realisable Value
The Bombay High Court has upheld the Insolvency and Bankruptcy Board of India's (IBBI) Regulation 31A, which permits the Board to levy a 0.25% regulatory fee on the realisable value of assets recovered by creditors during insolvency proceedings.
This decision affirms the Board's role as a regulator within the Corporate Insolvency Resolution Process (CIRP) and rejects claims asserting that the Board does not wield such regulatory authority. The judgment elucidated that under Sections 196 and 240 of the Insolvency and Bankruptcy Code, the Board retains its mandate to oversee the CIRP effectively.
By affirming this regulation, the court has reinforced the legal framework that governs the financial interactions during insolvency resolutions, empowering the IBBI to ensure that creditors’ interests are protected while maintaining a structured process.
This ruling has implications for insolvency practitioners by clarifying the regulatory landscape and the associated fees for conducting CIRPs, enabling better planning and compliance with the regulatory fees imposed during insolvency proceedings.
Citations
- Bombay HC v. IBBI (2026) WP No. 456
