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2022 (9) TMI 569 - HC - Insolvency and BankruptcyJurisdiction - State Government is the appropriate Government under the scheme of the industrial Disputes Act or not - scope of Ministry of Commerce and Industry, Government of India - whether Rubber Wood India Private Limited, first petitioner in the second petition, can be said to be controlled and managed by the Central Government or not? HELD THAT - Any officer of the Central Government when deputed by that Government shall have the right to attend the meetings of the Board and take part in the proceedings but shall not be entitled to vote. Chairman shall be appointed by the Central Government and two members to represent the State of Tamil Nadu and one of whom shall the person representing the rubber producing interests. Rubberwood India Private Limited is an instrumentality of the Central Government, has been established under the Rubber Act, 1947 (Central Act) and the membership of the Company has been restricted to only Rubber Board, Andamans Timber Industries Limited, Kerala State Industrial Development Corporation Limited (KSIDC) and any other person/Registered Co-operative Societies /Company formed under the Companies Act, 1956 /Statutory Bodies approved by the Board. Rubber Board shall have the power to nominate five Directors, KSIDC shall have the power to nominate one Director and Financial institutions, banks extending loan to the Company may nominate one Director each and two Directors to be appointed by the Company in General meeting. After the appointment of the Interim Resolution Professional whether the reference to the Central Tribunal can be permitted to continue or workmen represented by the Union are required to submit the claims before him? - HELD THAT - Regulation 9 provides that a person claiming to be a workman or employee of the corporate debtor, which in present case would be Rubberwood India Private Limited represented through Interim Resolution Professional, shall submit a claim with proof to said Professional in person, by posts or by electronic forms prescribed in Form D of the Schedule. It can also submit supplementary documents or clarifications in support of the claim and for the dues more than one workman or employee any authorised representative is permitted to submit one claim - The right to challenge the decision of the Resolution Professional has also been provided under the Act through an appeal under Section 60(5) of the Code of 2016 before NCLT, and again before NCLAT under provisions of Section 61 of the Code. Thus, workmen respondents are directed to file their respective claims before the Interim Resolution Professional in accordance with the Regulation 9 ibid. Interim resolution professional is directed to adjudicate the claim of the workmen strictly as per the Regulations and afford an opportunity to the workmen to inspect the record and prove their case in support of the claim and adjudicate the same within a period prescribed under the Code - petition disposed off.
Issues Involved:
1. Jurisdiction of the Central Government Industrial Tribunal cum Labour Court. 2. Status of Rubber Wood India Private Limited as controlled by the Central Government. 3. Reference of disputes to the Central Tribunal. 4. Role and claims of workmen under the Insolvency and Bankruptcy Code, 2016. 5. Liability of a shareholder in disputes under the Industrial Disputes Act. Issue-wise Detailed Analysis: 1. Jurisdiction of the Central Government Industrial Tribunal cum Labour Court: The primary contention in both writ petitions revolves around the jurisdiction of the Central Government Industrial Tribunal cum Labour Court. The petitioners argue that the Central Tribunal lacks jurisdiction as Rubber Wood India Private Limited is not controlled or managed by the Central Government. The court examined the definitions of 'appropriate Government' under Section 2(a) of the Industrial Disputes Act, 1947, and concluded that the Central Government has the authority to refer disputes to the Central Tribunal if the industry is carried on by or under the authority of the Central Government. 2. Status of Rubber Wood India Private Limited as controlled by the Central Government: The court analyzed whether Rubber Wood India Private Limited, the first petitioner in the second writ petition, is controlled and managed by the Central Government. It referred to Section 4 of the Rubber Act, 1947, and the Memorandum and Articles of Association of Rubber Wood India Private Limited. The court found that the company is an instrumentality of the Central Government, with significant control exercised by the Rubber Board, which holds more than 76% of the shares and has the power to appoint directors and the chairman. 3. Reference of disputes to the Central Tribunal: The court upheld the reference of disputes to the Central Tribunal by the Central Government, as stated in the order dated 09.01.2020. The court found that the reference was legal and justified based on the facts and circumstances of the case. The court rejected the argument that the State Government should be the appropriate authority to refer the matter to the Labour Court. 4. Role and claims of workmen under the Insolvency and Bankruptcy Code, 2016: The court addressed the issue of whether the reference to the Central Tribunal should continue after the appointment of the Interim Resolution Professional under the Insolvency and Bankruptcy Code, 2016. The court referred to Sections 10, 13, and 18 of the Code and Regulation 9 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The court directed the workmen to file their claims before the Interim Resolution Professional and instructed the professional to adjudicate the claims as per the regulations. 5. Liability of a shareholder in disputes under the Industrial Disputes Act: The court examined whether a shareholder, specifically the Rubber Board, could be made a party to the proceedings under the Industrial Disputes Act. The court concluded that a shareholder cannot be independently made a party for adjudication of disputes. The court clarified that the notice dated 09.01.2020 should be construed as a claim against the company and not against the shareholder. The court allowed the first writ petition in these terms, protecting the Rubber Board from being dragged into litigation unnecessarily. Conclusion: The court disposed of the second writ petition by directing the workmen to file their claims before the Interim Resolution Professional and adjudicated the first writ petition by clarifying that the shareholder (Rubber Board) cannot be made a party to the dispute. The court upheld the jurisdiction of the Central Tribunal and confirmed the status of Rubber Wood India Private Limited as controlled by the Central Government.
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