2019 (5) TMI 1848 - Tri - Insolvency and Bankruptcy

Seeking that the Applicant herein to be made a party to the Company Petition and be given an opportunity to be heard in any proposed resolution plan - Seeking directing the parties to the Company Petition to furnish copies of the papers to the petition and any proposed resolution plan that may be made with regard to the Corporate Debtor etc. - HELD THAT - After hearing the learned Counsel for Applicant, the bench has directed the Resolution Professional to reconsider the grievance of the workers with regard to the provident fund, Pension fund, gratuity fund etc. Accordingly, the Authorised representative of workers and employees submitted that detailed calculations of the claims pertaining to Bonus, Gratuity, Employee Provident Fund and Wages including bifurcation of the amount due pertaining to the 24 months prior to the Insolvency Commencement dated, 19th March, 2019 with regard to the 138 workmen and none out of the 5 employees. he grievances of the applicants were duly considered by the Resolution Professional and CoC, in accordance with law. As per provision of Code, CIRP would be conducted by IRP/RP with CoC at the helm of affairs of Corporate Debtor, subject to overall superintending powers to be exercised by Adjudicating Authorities. All the decisions of CoC would be taken as per law and those decisions would be binding on Corporate Debtors, employee, all stakeholders etc. as per section 31(1) of the Code. It is settled position of law that even the Adjudicating Authority will have power only to direct CoC to reconsider the grievance of other parties, who are not part of CoC, if it finds that those grievances are required to be re-considered again. Basically all issues/claims arise out of CIRP would be decided basing on liquidation value of Assets and Liabilities of Corporate Debtor. Since the CoC has already reconsidered the claims of the applicant vide CoC Meeting dated 15th April, 2019, I cannot entertain the instant application and it is not maintainable and thus it is liable to be disposed of.

Summary

Issues Involved:
1. Application filed by Employees of a Company seeking to be made a party to the Company Petition and be heard in any proposed resolution plan.
2. Modification of the resolution plan to provide employment with continuity of services and payment of dues to the employees.
3. Grievances of workers regarding provident fund, pension fund, gratuity fund, etc., under the resolution plan.

Analysis:
1. The application was filed by the Employees of the Company seeking to be included in the Company Petition and given a chance to participate in any proposed resolution plan. The Employees highlighted issues such as non-payment of wages, illegal lockout, and non-remittance of statutory contributions by the Company. They expressed concerns about the impact of the resolution plan on their rights as secured creditors under the Companies Act. The Tribunal noted the Employees' concerns and directed the Resolution Professional to reconsider their grievances and ensure their rights are protected during the resolution process.

2. Subsequently, another application was filed seeking modification of the resolution plan to provide employment continuity and payment of dues to the employees. The Employees requested inclusion in the Monitoring Agency under the plan. The Resolution Applicant responded by considering the request for increased consideration but clarified that retention of all employees would depend on viability. The Corporation Bank and other financial institutions objected to ceding their share to accommodate increased consideration for the employees.

3. The Tribunal carefully considered the pleadings and provisions of the Insolvency and Bankruptcy Code. After reviewing the detailed calculations of the claims related to bonus, gratuity, provident fund, and wages, the Resolution Professional offered an additional amount to the workers beyond the total consideration in the resolution plan. The Resolution Applicant agreed to increase the total consideration and allocate a specific amount towards the workers' dues. The Tribunal found that the grievances of the Employees were duly considered by the Resolution Professional and the Committee of Creditors, in compliance with the law. It emphasized that decisions of the Committee of Creditors are binding on all stakeholders, including employees. The Tribunal concluded that the application was not maintainable as the Committee of Creditors had already reconsidered the claims of the Employees, and thus disposed of the application with an observation for the Resolution Applicant to address the remaining grievances during the plan's implementation.