2019 (6) TMI 764 - AT - Insolvency and Bankruptcy

Release of salary in favour of employees of the respective Corporate Debtors - Corporate Insolvency Resolution Process - HELD THAT - Learned counsel appearing on behalf of the employees representatives submit that a number of working employees have been paid the salary but the Dearness Allowance etc. have not been paid. In some cases even the basic salary has not been paid. However, as individual claim of each of the employee cannot be decided by this Appellate Tribunal, we give liberty to the individual aggrieved employee to approach the Resolution Professional(s) with representation showing that they are working but have not been paid the basic salary. In such case, the Resolution Professional(s) may verify from the record as to whether such employee is working during the Corporate Insolvency Resolution Process or not and paid wages or not. Appeal disposed off.

Summary

Issues:
1. Non-payment of salaries to working employees during Corporate Insolvency Resolution Process.
2. Request for release of salaries by employees' representatives.
3. Inability of Adjudicating Authority to pass specific directions.
4. Payment of salaries to employees by Corporate Debtors.
5. Non-payment of Dearness Allowance and basic salary to some employees.
6. Liberty granted to individual employees to approach Resolution Professionals for non-payment of basic salary.
7. Prohibition on reagitating the matter by employee representatives during Resolution Process completion.

Analysis:
1. Two separate 'Corporate Insolvency Resolution Process(s)' were initiated against 'Dishnet Wireless Limited' and 'Aircel Limited'. Employees' representatives filed applications for release of unpaid salaries during the process.
2. The Adjudicating Authority, considering the difficulty in arranging funds for salary payments, directed the Resolution Professional to provide employee details and salary information. The applications were disposed of on 16th October, 2018.
3. Funds were released to the Corporate Debtors as per the Supreme Court's direction, and salaries up to January 2019 were paid.
4. Salaries for the current period up to February 2019 were also paid to the working employees of both Corporate Debtors.
5. Some employees did not receive Dearness Allowance and basic salary. The Appellate Tribunal allowed individual aggrieved employees to approach Resolution Professionals with evidence of non-payment.
6. Resolution Professionals were tasked with verifying non-payment claims and ensuring wages are disbursed to eligible employees during the Corporate Insolvency Resolution Process.
7. The Tribunal prohibited employee representatives from reagitating the matter until the Resolution Process completion. Both appeals were disposed of with no costs incurred.