Setback to BSE: Listing Fee dues cannot be recovered under Operational Debt, rules NCLAT [Read Order]

The Delhi Bench of National Company Law Appellate Tribunal (NCALT) while dismissing the appeal of the Bombay Stock Exchange Limited (BSE) held that the listing fee dues cannot be recovered under operational debt.

The Appellant, Bombay Stock Exchange Limited filed an Application under Section 9 of the IB Code against the Respondent (Corporate Debtor) claiming an amount of Rs.8,85,526/- as on 1st April, 2017 as Operational Creditor. The Corporate Debtor entered into a Listing Agreement with the BSE.

The case of the Appellant was that Corporate Debtor defaulted in making payment of listing fees as per Clause 38 of the Listing Agreement. Invoice dated 1st April, 2017 for an amount of Rs.8,85,526 for the Annual Listing Fees payable for the year
2017-18 and arrears payable upto 2016-17 was demanded.

 The Corporate Debtor opposed the Application and prayed that the same may be dismissed at the threshold on the ground of maintainability. The defence of the Corporate Debtor was that listing fees, which is claimed by the Operational Creditor is not an operational debt but a fee payable in pursuance to Regulation 14 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The fee is a ‘regulatory fee’ and cannot be termed as an ‘operational debt’. The Application filed by the Appellant was not maintainable.

The Appellant submitted that there is no method for recovery of dues provided by the SEBI, and cannot be accepted as SEBI is empowered to punish the defaulters for the recovery of regulatory dues. There are ample provisions for recovering under the SEBI Act and the circulars issued by the SEBI from time to time.

The coram headed by the Chairperson, Justice Ashok Bhushan and Technical Member, Alok Shrivastava held that the Department handling listings are Regulatory Department and the ‘listing fee’ is nothing but a ‘regulatory fee’.

“When we look into the substance of the matter, we find that Appellant has initiated the insolvency proceedings against the Corporate Debtor only as a recovery mechanism to recover dues of ‘listing fees’. IB Code is not meant for recovery of dues of creditors,” the NCLAT while dismissing the appeal said.

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