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2023 (3) TMI 648 - AT - Insolvency and BankruptcySeeking approval of the resolution plan - whether the employees/workmen whom the Appellants are representing as various office bearers of the trade unions had put up their claim with proof in order to recover the said amount as has been done by 11 other employees of the same Corporate Debtor who had filed their applications in accordance with Regulations? HELD THAT - It has been repeatedly held that IBC is a complete code in itself. Various Regulations have been made in terms of various provisions of the Code in which Regulations have also been made which came into force w.e.f. 01.12.2016. Chapter IV of the Regulations dedicated to the proof of claims of various class of creditors in which Regulation 9 is related to the claims of the workmen/employees. A close reading of Regulation 9(2) of the Regulations says that where there are dues to be paid to the workmen or employees of the Corporate Debtor they may collectively choose an authorised representative to submit their claim with proof but in Form-E of the Schedule. The word used in Regulation 9(2) of the Regulations is may as against shall in Regulation 9(1) of the Regulations which means that Regulation 9(2) of the Regulations is provided more as a matter of convenience for the workmen or employees but still demands a declaration in respect of claim with proof and verification of the Form Particulars mentioned therein. In the present case firstly there is no such claims set up by the workmen/employees individually in terms of Regulation 9(1) of the Regulations by resorting to form-D as is evident from Annexure B appended with the application i.e. CA (IB) No. 650/KB/2019. Besides it has been the positive case of Respondent that even this list was never received by the RP because it has been mentioned in the letter dated 11.03.2019 (Annexure A4) that the said list shall be sent by the office bearers of the Appellants by registered post but no evidence is brought on record in this regard that the list was ever sent by registered post to the RP who has categorically denied it by way of an affidavit filed before the Adjudicating Authority. Evidently there is a total non-compliance of Regulation 9(1) of the Regulations. Similarly there is non-compliance of Regulation 9(2) of the Regulations as well because Annexure A4 dated 11.03.2019 in no manner an authority given to the authorised representative rather it is more of a covering letter by the office bearers of the trade unions of the workmen and the clerks association. Therefore even the provisions of Regulation 9(2) of the Regulations has not been complied with. It has also come on record that a provision has been made to the extent 20% of total amount of Rs. 12.78 Crore in order to satisfy any amount in future which is yet to be claimed but it cannot be said that the amount which has been admitted has not been paid or made a provision in the resolution plan by the RP/SRA. There are no illegality in the order by which the application has been dismissed - appeal dismissed.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP). 2. Invitation and evaluation of Expression of Interests (EOIs) and Resolution Plans. 3. Approval of the Resolution Plan by the Committee of Creditors (CoC). 4. Claims by trade unions for gratuity and leave liability. 5. Discrimination among employees in claim satisfaction. 6. Compliance with procedural regulations for claims by workmen/employees. Summary: 1. Initiation of CIRP: Jayanta Kumar Panja, an ex-employee of Fort Gloster Industries Limited (Corporate Debtor), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code) for initiation of CIRP due to default in payment of Rs.1,13,946/- towards his gratuity. The application was admitted by the Adjudicating Authority (NCLT, Kolkata) on 09.08.2018, and Manish Jain was appointed as the Interim Resolution Professional (IRP), later replaced by Bijay Murmuria as the Resolution Professional (RP). 2. Invitation and Evaluation of EOIs and Resolution Plans: The RP published form-G on 05.02.2019 inviting EOIs, receiving responses from Prudent ARC Limited and Gloster Limited by 20.02.2019. M/s Hooghly Infrastructure Pvt. Ltd. also filed an EOI, allowed by the Adjudicating Authority on 01.04.2019. Two resolution plans were received from M/s Gloster Limited and M/s Hooghly Infrastructure Pvt. Ltd. by 06.04.2019. A forensic audit by V. Singhi & Association found no preferential or fraudulent transactions. The CoC, in its 6th meeting, noted inconsistencies in Hooghly Infrastructure's plan. Both applicants updated their plans by 19.04.2019, with Gloster Limited scoring higher in the evaluation matrix and being declared H1 bidder. The resolution plan of Gloster Limited was approved by 73.21% voting in favor. 3. Approval of the Resolution Plan by CoC: The RP filed an application under Section 30(6) of the Code for approval of the resolution plan of Fort Gloster Industries Ltd. submitted by Gloster Limited, approved by the CoC with a 73.21% vote share. 4. Claims by Trade Unions for Gratuity and Leave Liability: The appellants, various trade unions, filed an application under Section 60(5) of the Code on 06.05.2019, seeking payment of gratuity and leave liability for employees up to 31.08.2018, claiming Rs. 60,22,33,718/-. The Adjudicating Authority found that claims of 11 employees totaling Rs. 0.89 Crore were received within the stipulated period, and claims of four workmen submitted beyond 90 days were also admitted. The resolution plan allocated Rs. 1.30 Crore for workmen's claims and provided for 20% payment of unclaimed dues of Rs. 12.78 Crore. 5. Discrimination Among Employees in Claim Satisfaction: Counsel for the appellants argued that similarly situated employees were discriminated against, as claims of 11 employees were satisfied while nothing was allocated for the appellants. The Adjudicating Authority dismissed this claim, observing that the unions' claims were not substantiated with supporting materials. 6. Compliance with Procedural Regulations for Claims by Workmen/Employees: The respondents argued that the appellants did not comply with the prescribed procedure under Regulation 9 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The claims were not filed in Form-D or Form-E as required, and no documentary evidence was provided to substantiate the claims. The Adjudicating Authority found that the RP had satisfied the claims of employees who filed in accordance with the regulations and had made provisions for future claims. Conclusion: The appeal was dismissed, with the Tribunal finding no illegality in the order dismissing the application CA (IB) No. 650/KB/2019. The appellants' claims were not filed in compliance with the procedural regulations, and the RP had adequately addressed the claims of employees who followed the prescribed process.
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