NCLT Chennai dismisses EY's Rs 3.11 crore insolvency plea against Mobase India

The National Company Law Tribunal (NCLT) in Chennai has dismissed an insolvency petition filed by EY against Mobase India Ltd. The petition sought approximately Rs 3.11 crore, including interest, in professional fees related to GST proceedings for the financial years 2019-20 through 2021-22.

EY had entered into an engagement agreement with Mobase that included an initial fee of Rs 25 lakh and a 1% success fee based on the relief obtained from GST demands. Mobase contested the claim, arguing that the GST proceedings were not yet final and disputing the definition of a successful outcome. The NCLT ruled that a bona fide dispute existed regarding the entitlement to the success fee, meaning the insolvency route could not be used for recovery. The tribunal also suggested that the Institute of Chartered Accountants of India (ICAI) might examine the regulatory aspects of the fee arrangement.