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2021 (4) TMI 1370 - Tri - Insolvency and BankruptcyMaintainability of petition u/s 9 of IBC - petition barred by time limitation or not - BIFR proceedings were finalized and was under implementation in respect of the defaulted outstanding debt of the workers/employees of the CD - commencement of CIRP in respect of the debt arising out of the Sanctioned Rehabilitation Scheme by the Hon'ble BIFR/AAIFR which is yet to be implemented after the BIFR/AAIFR stands dissolved - Pre-existing dispute or not - HELD THAT - This case is a case as to how simple issues can be complicated inadvertently. As noted from the written submissions made by the Operational Creditor, issues involved is implementation of BIFR Scheme approved by the AAIFR which is to be treated as an approved resolution plan in terms of provisions of Section 252 r.w. EIGHTH SCHEDULE of Insolvency and Bankruptcy Code, 2016. Once this is so, application under Section 9 of Insolvency and Bankruptcy Code, 2016 is as such not maintainable because for non-implementation for an approved resolution plan, a different application has to be made as per the provisions of Section 33(3) of Insolvency and Bankruptcy Code, 2016. From the perusal of 3rd proviso which was inserted in the EIGHTH SCHEDULE with effect from 24.05.2017 by the Insolvency Bankruptcy Code (removal of difficulties) order, any scheme sanctioned or under implementation in terms of provisions of SICA Act, 1985 is deemed to be an approved resolution plan and the same is to be dealt with in accordance with Part-II of the Code. Part-II of the Code pertains to Corporate Insolvency Resolution Process and also provide for passing of an order of liquidation under Section 33(2) of Insolvency and Bankruptcy Code, 2016 in case an approved resolution plan is not implemented. Any aggrieved party can initiate such action. Accordingly, this application is not maintainable and therefore, rejected. Even otherwise, such application, is not maintainable because this application has been filed after expiry of 643 days from 01.12.2016, being the date of Insolvency and Bankruptcy Code, 2016 becoming effective and as per the 2nd proviso of the EIGHTH SCHEDULE, this should have been filed within 180 days therefrom. Thus, for this reason also, application filed under Section 9 of Insolvency and Bankruptcy Code, 2016, is not maintainable. This application stands dismissed.
Issues Involved:
1. Whether the application is barred by limitation. 2. Whether there is a pre-existing dispute. 3. Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 should be admitted for CIRP. 4. Whether the demand notice is defective. 5. Whether the application is maintainable as a joint petition. Issue-wise Detailed Analysis: 1. Limitation: The application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) was filed by the operational creditors, represented by Mr. Habib Khan, for default of Rs. 11,49,39,302 due to non-payment of dues and non-compliance with the AAIFR sanctioned Rehabilitation Scheme. The operational creditors argued that the claim is within the limitation period as per Article 137 of the Limitation Act, 1963, citing the exclusion of the period under Section 22 of SICA, 1985. They relied on various judgments, including Mr. Gouri Prasad Goenka v. Punjab National Bank & ors., to support their claim for exclusion of time. However, the Corporate Debtor contended that the claim is time-barred, referencing the judgment in Mazda Agencies vs. Hemant Plastics & Chemicals Ltd., which emphasized that applications under IBC cannot be considered suits and thus are not subject to the same exclusions as suits under SICA. 2. Pre-existing Dispute: The Corporate Debtor argued that there are pre-existing disputes between the parties, citing various pending litigations and referencing the Supreme Court judgment in Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd., which held that the existence of a dispute is sufficient to reject an insolvency petition. The operational creditors countered that there are no genuine disputes, as the debt arises from a statutory obligation under the AAIFR sanctioned Rehabilitation Scheme and is undisputed as per multiple orders of Hon'ble BIFR/AAIFR and the Supreme Court. 3. Admission of Application under Section 9: The operational creditors argued that the default in payment of debt under the sanctioned Rehabilitation Scheme triggers the initiation of CIRP. They emphasized that the debt is statutory in nature and that the Corporate Debtor has failed to provide proof of payment. The Corporate Debtor contended that the application is not maintainable under Section 9 of IBC as the issues relate to the implementation of a BIFR Scheme, which should be treated as an approved resolution plan under Section 252 r.w. EIGHTH SCHEDULE of IBC. They argued that non-implementation of an approved resolution plan should be addressed under Section 33(3) of IBC, not Section 9. 4. Defective Demand Notice: The Corporate Debtor argued that the demand notice is defective as it does not specify the exact amount of debt and the date of default, making it unenforceable. They also contended that the notice was issued by an individual representing 125 employees, which is not permissible under law. The operational creditors did not specifically address the alleged defects in the demand notice in their submissions. 5. Maintainability of Joint Petition: The Corporate Debtor argued that the petition is not maintainable as a joint petition, referencing the Supreme Court judgment in JK Jute Mill Mazdoor Morcha vs. Juggilal Kamplavat, which held that only a registered trade union can maintain a petition on behalf of its members. They contended that the petition filed by an individual representing multiple employees is not permissible. The operational creditors argued that the petition is maintainable, citing judgments that allow workers to file applications under Section 9 either singularly or jointly. Conclusion: The Tribunal concluded that the application under Section 9 of IBC is not maintainable for the following reasons: (i) The application pertains to the implementation of a BIFR Scheme, which should be treated as an approved resolution plan under Section 252 r.w. EIGHTH SCHEDULE of IBC. Non-implementation of such a plan should be addressed under Section 33(3) of IBC. (ii) The application was filed after the expiry of 643 days from the date IBC became effective, exceeding the 180-day period allowed under the EIGHTH SCHEDULE. (iii) The Tribunal granted liberty to the operational creditors to file an application under Section 33(3) of IBC, subject to compliance with relevant provisions of law. Order: The application under Section 9 of IBC, CP(IB) 469 of 2018, is dismissed. Interim applications IA 18 of 2020 and IA 115 of 2020 are also dismissed as they have become infructuous.
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