2023 (12) TMI 257 - AT - Insolvency and Bankruptcy

Approval of the Resolution Plan - Appellants case is that they are workers engaged by sub-contractor and in the Resolution Plan, the claims submitted on behalf of sub-contracted workers have been accepted only to the extent of 8% whereas workmen of the Corporate Debtor have been proposed payment of 100% of their claim - HELD THAT - The Hon ble Supreme Court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT held equitable treatment is to be accorded to each creditor depending upon the class to which it belongs secured or unsecured, financial or operational. In the present Appeal, the claim which was filed through sub-contractor cannot be treated as workmen of the Corporate Debtor. The Resolution Plan has dealt with claim as admitted by Resolution Professional and reflected in the Information Memorandum. The claim filed by the Operational Creditor in Form B has been dealt with in accordance with the IBC and CIRP Regulation and the claim which was filed by the Operational Creditor cannot be transposed to be claim of workmen for the purpose of this Appeal. The issue raised by the Counsel for the Appellant that workers employed by sub-contractor are also workers of the Corporate Debtor need no answer in this Appeal since the question is as to treatment of the claim which was submitted in the CIRP of the Corporate Debtor and admitted by the Resolution Professional. The submission which has been advanced by Counsel for the Appellant that due to the workers of sub-contractor being not aware of the CIRP could not file their claim cannot be considered at the stage when all claims have been collated and admitted and dealt with in the Resolution Plan. Challenge in this Appeal is to the order of the Adjudicating Authority approving the Resolution Plan - there is no infirmity in the Resolution Plan giving different treatment to the workmen dues and those claimed by the Operational Creditor. Appeal dismissed.

Summary

Issues Involved:

1. Substitution of Appellants.
2. Claims of sub-contracted workers vs. Corporate Debtor's workmen.
3. Filing of claims in CIRP.
4. Treatment of claims in the Resolution Plan.
5. Equitable treatment of creditors.

Summary:

1. Substitution of Appellants:
The Appeal was initially filed by an unregistered union, 'Thekedaar Kramchari Committee'. IA No.5182 of 2023 was filed to amend the memo of parties by substituting the Appellant/Union with five individual appellants. The Tribunal allowed this substitution in the interest of justice.

2. Claims of sub-contracted workers vs. Corporate Debtor's workmen:
The Appellants, who are workers engaged by sub-contractors, argued that their claims were only accepted to the extent of 8% in the Resolution Plan, whereas the workmen of the Corporate Debtor were proposed payment of 100% of their claims. They contended that there should be no difference between workmen directly employed by the Corporate Debtor and those engaged through sub-contractors, as both perform the same duties.

3. Filing of claims in CIRP:
The Respondents argued that the Appellants did not file any claims in the CIRP of the Corporate Debtor. The claims were filed by the sub-contractors themselves as operational debt. The Tribunal noted that the claims were submitted in Form-B by operational creditors, not as workmen.

4. Treatment of claims in the Resolution Plan:
The Tribunal observed that the Resolution Professional admitted the claims of various vendors as operational creditors, and these claims were dealt with in the Resolution Plan accordingly. The Tribunal emphasized that the claims filed by operational creditors cannot be treated at par with workmen's claims. The Resolution Plan differentiated between workmen dues and operational debt, which is in accordance with Section 53 of the IBC.

5. Equitable treatment of creditors:
The Tribunal referred to the judgment of the Hon'ble Supreme Court in "Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta & Ors.", which held that equitable treatment is to be accorded to each creditor depending upon the class to which it belongs: secured or unsecured, financial or operational. The Tribunal concluded that the Resolution Plan's differentiation between payment to workmen and operational creditors is lawful and cannot be faulted.

Conclusion:
The Tribunal dismissed the Appeal, stating that the Resolution Plan's treatment of claims is in accordance with the IBC and CIRP Regulations. The Tribunal found no error in the order of the Adjudicating Authority approving the Resolution Plan.