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2024 (7) TMI 1077 - AT - Insolvency and BankruptcyDismissal of application - requirement of payment to 103 employees towards arrears of salary - examination of settlement with 103 employees - double paymnet were done to employees or not - HELD THAT - The prayers made by the Appellant were not liable to be allowed. Whatever prayers have been made has been clearly categorically explained in the reply affidavit of Respondent filed in this Appeal, as well as before the Adjudicating Authority. There is no occasion for holding RP personally liable for any payment made to 103 employees. It is pleaded by the RP that the payments, which have been made, were made with the approval of the CoC. Any payment after CIRP having been made by the RP with the approval of CoC, no personal liability can be fastened on the RP. The prayers made by the Appellant in the Application, could not have been allowed and in view of the affidavit filed by the RP, the apprehension that Appellants 103 employees shall receive double payment has also been clarified and those 103 employees shall not be entitled to be made any payment as per the Resolution Plan towards their unpaid salary. Whereas, 103 employees shall also be entitled for payment of gratuity and provident fund. There is no ground has been made out to interfere with the order passed by the Adjudicating Authority - appeal dismissed.
Issues Involved:
1. Validity of the lumpsum payment to 103 employees. 2. Entitlement of employees to pre-CIRP dues. 3. Personal liability of the Resolution Professional (RP) for payments made. 4. Allegations of double payment to 103 employees. Detailed Analysis: 1. Validity of the lumpsum payment to 103 employees: The Corporate Insolvency Resolution Process (CIRP) against Jet Airways commenced on 20.06.2019. An Asset Preservation Team (APT) was formed, consisting of 103 employees who insisted on some lumpsum payment due to uncertainties. The RP, with the approval of the Committee of Creditors (CoC), made these payments. The Appellant challenged these payments, claiming they were arbitrary and unreasonable. The Tribunal noted that the payments were made to ensure the preservation of the Corporate Debtor's assets and were approved by the CoC. The affidavit filed by the RP clarified that the 103 employees had waived their pre-CIRP dues in exchange for the lumpsum payment. 2. Entitlement of employees to pre-CIRP dues: The Appellant argued that the 103 employees should not receive any further payments from the approved Resolution Plan, as they had already received lumpsum payments. The Tribunal referred to its previous judgment dated 21.10.2022, which held that workmen and employees are entitled to their provident fund and gratuity minus the amount already earmarked in the Resolution Plan. The RP's affidavit confirmed that the 103 employees would not receive any further payments from the Resolution Plan for their unpaid salaries but would be entitled to provident fund and gratuity. 3. Personal liability of the Resolution Professional (RP) for payments made: The Appellant sought to hold the RP personally liable for the payments made to the 103 employees. The Tribunal found no basis for this claim, as the payments were made with the approval of the CoC. The RP acted in accordance with the Code and the directions of the CoC, and thus, no personal liability could be fastened on the RP. 4. Allegations of double payment to 103 employees: The Appellant alleged that the 103 employees would receive double payment. The RP's affidavit dispelled this concern, stating that the employees had waived their pre-CIRP claims and would not receive any further payments from the Resolution Plan for unpaid salaries. The Tribunal accepted this clarification and found no merit in the allegation of double payment. Conclusion: The Tribunal dismissed the Appeal, finding no grounds to interfere with the Adjudicating Authority's order rejecting MA No.3387 of 2019. The Tribunal clarified that the 103 employees would not receive double payment and would only be entitled to provident fund and gratuity as per the previous judgment. The RP was not personally liable for the payments made, as they were approved by the CoC. The Appeal was dismissed with no order as to costs.
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