2023 (12) TMI 1075 - AT - Insolvency and Bankruptcy

Approval of Resolution Plan - HELD THAT - Adjudicating Authority has directed that the proceeds from sale of the aircraft will be deposited in an escrow account and be utilized to discharge the payments to various stakeholders in accordance with the Resolution Plan. Aircraft is a depreciating asset and huge costs are being incurred for preservation and parking of the same. Appellant was trying to recover its dues de horse the Resolution Plan. Erstwhile Resolution Professional has complied with the NCLAT order and communicated the computation of dues of the workmen and employees to the Successful Resolution Applicant. The impugned order fully protects the interests of the Appellant since it has directed the amount proceeds from the sale to be kept in escrow account. Approval of the Resolution Plan - HELD THAT - The Adjudicating Authority in the impugned order while considering the rival submission of the parties has come to the conclusion that the sale process with regard to which LoI was issued on 19.10.2022 had concluded in view of the performance on the part of the Ace Aviation. Submission of the Successful Resolution Applicant for re-bidding insofar as three aircrafts was concerned was not accepted. With regard to other two aircrafts whose process was halted on 11.11.2022, direction was issued to reinitiate the process and conclude the sale of aircrafts after considering the Ace Aviation as one of the eligible bidders. The Adjudicating Authority did not commit any error in directing to conclude the sale agreement of three aircrafts for which LoI was already issued - there are no good ground to interfere with the order passed by the Adjudicating Authority in IA No.3747 of 2022. The interests of the Successful Resolution Applicant are also protected since the Adjudicating Authority had directed that the proceeds of the sale of aircrafts is to be deposited in the escrow account and dealt with in accordance with the approved Resolution Plan - The order disposing is not an order which has any consequence on the manner of distribution of the sale of the aircrafts as observed by the Adjudicating Authority sale proceeds has to be distributed as per the Resolution Plan. Rights and contentions of the Successful Resolution Applicant are left open to be raised at the relevant time with regard to distribution of sale proceeds as and when occasion arises. Recovery of the PF and gratuity dues of the workmen and employees of the Corporate Debtor - HELD THAT - The sale proceeds having been directed to be deposited in escrow account which has to be distributed in accordance with the approved Resolution Plan, the Appellants are fully protected the orders passed by the Adjudicating Authority in no manner affects the entitlement of the Appellant- All India Jet Airways Officers and Staff Association to receive their dues under the Resolution Plan as per order of this Appellate Tribunal dated 21.10.2022. The Adjudicating Authority has not committed any error in partly allowing IA No.883 of 2023 - there are no error in the order passed by the Adjudicating Authority in IA No.883 of 2023. There are no grounds to interfere with the orders of the Adjudicating Authority - Appeal dismissed.

Summary

Issues Involved:
1. Jurisdiction of Adjudicating Authority under Section 60(5) of IBC.
2. Validity of the sale process of aircrafts initiated by the Monitoring Committee.
3. Rights of workmen and employees regarding unpaid provident fund and gratuity dues.

Summary:

Issue 1: Jurisdiction of Adjudicating Authority under Section 60(5) of IBC
The Appellant contended that the Adjudicating Authority lacked jurisdiction to entertain the application filed by Ace Aviation under Section 60(5) of the Insolvency and Bankruptcy Code (IBC). However, the Tribunal observed that the sale process initiated by the Monitoring Committee was in accordance with the approved Resolution Plan, thus falling within the jurisdiction of the Adjudicating Authority. The application filed by Ace Aviation arose out of the insolvency process, and the Tribunal held that the Adjudicating Authority had the jurisdiction to decide the matter.

Issue 2: Validity of the Sale Process of Aircrafts Initiated by the Monitoring Committee
The Monitoring Committee initiated the sale process for the aircrafts owned by Jet Airways as per the Resolution Plan. The sale process was kept in abeyance by an email dated 11.11.2022. Ace Aviation filed an application to declare the communication keeping the sale process in abeyance as wrongful and to direct the continuation of the sale process. The Tribunal upheld the Adjudicating Authority's order directing the completion of the sale process for three aircrafts for which Letters of Intent (LoIs) were issued and to reinitiate the process for the remaining two aircrafts. The Tribunal found no error in the Adjudicating Authority's decision, emphasizing that delaying the sale would further diminish the value of the aircrafts.

Issue 3: Rights of Workmen and Employees Regarding Unpaid Provident Fund and Gratuity Dues
The Appellant, representing the workmen and employees, sought a stay on the sale of the Corporate Debtor's assets until their outstanding provident fund and gratuity dues were paid. The Adjudicating Authority directed that the proceeds from the sale of the aircrafts be deposited in an escrow account and dealt with in accordance with the approved Resolution Plan, which includes the claims of workmen and employees. The Tribunal upheld this decision, noting that the interests of the workmen and employees were protected and their dues would be addressed as per the Resolution Plan.

Conclusion:
The Tribunal dismissed both appeals, affirming the Adjudicating Authority's orders dated 17.10.2023 in IA Nos. 3747 of 2022 and 883 of 2023. The sale process of the aircrafts was to be completed, and the proceeds were to be deposited in an escrow account for distribution in accordance with the approved Resolution Plan. The Tribunal found no grounds to interfere with the Adjudicating Authority's decisions.