2019 (7) TMI 1425 - AT - Insolvency and Bankruptcy

Salary of a Liquidator - period involving Corporate Insolvency Resolution Process and the prior period - Appellants submitted that the Adjudicating Authority has failed to decide the claim of the Appellantsworkmen, who actually performed the duties during the Corporate Insolvency Resolution Process , but have not been paid the salary - HELD THAT - An order of liquidation has already been passed. This apart, the disputed question of fact, as to whether the Appellants have actually worked during the Corporate Insolvency Resolution Process or the earlier period, cannot be dealt with by the Adjudicating Authority till such information could have been obtained from the Resolution Professional or claim is decided by the Liquidator. We are not inclined to interfere with the impugned order dated 25th April, 2019, but allow the Appellants-all 272 workmen and employees to file individual claims before the Liquidator, who after going through the record and taking into consideration the pleadings made by workmen/ employees will determine the claim. If claim of one or other workmen/ employee is rejected, it will be open to them to move before the Adjudicating Authority, who may decide the same in accordance with law. Gratuity and Provident Funds - HELD THAT - It is sufficient to say that the same cannot be treated to be the asset of the Corporate Debtor . They are to be disbursed among the employees/ workmen who are entitled for the same. Appeal disposed off.

Summary

Issues:
- Appeal against the order of the Adjudicating Authority regarding non-payment of salary during Corporate Insolvency Resolution Process and prior period.
- Failure of the Adjudicating Authority to decide on the claim of the workmen.
- Disputed question of whether the workmen actually worked during the insolvency process.
- Disbursement of Gratuity and Provident Funds among entitled employees/workmen.

Analysis:
The appeal was filed by the Appellant-workmen challenging the order of the Adjudicating Authority which denied them relief regarding their unpaid salary during the Corporate Insolvency Resolution Process and a prior period. The Appellants argued that the Authority failed to address their claim for salary, which remained unpaid despite their work contributions during the insolvency process and the preceding period. They highlighted that while other similarly situated individuals had been paid, the Appellants were left without their salaries. The Adjudicating Authority had earlier directed the Resolution Professional to deposit a specific amount with the Registrar of the NCLT, which the Appellants believed should have been used to clear their pending salaries.

During the hearing, it was noted that a liquidation order had already been issued. The Tribunal acknowledged that determining whether the Appellants had indeed worked during the insolvency process or the earlier period required additional information that could be obtained from the Resolution Professional or decided by the Liquidator. Consequently, the Tribunal declined to intervene in the previous order but allowed all 272 workmen and employees to individually file claims with the Liquidator. The Liquidator would then review the claims, consider the pleadings made by the employees/workmen, and make a determination. If any claims were rejected, the individuals had the option to appeal before the Adjudicating Authority for a decision in accordance with the law.

Regarding Gratuity and Provident Funds, the Tribunal clarified that these funds were not assets of the Corporate Debtor but were meant to be disbursed among the entitled employees/workmen. The appeal was disposed of with this observation, and no costs were awarded. The judgment emphasized the importance of individual claims being assessed by the Liquidator and the subsequent right to appeal before the Adjudicating Authority, ensuring due process in resolving the salary dispute and disbursement of employee benefits.