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TMI Blog2019 (3) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted, but while dealing Tax matters or Financial matters it sometimes happen that the Law of Equity is not bestowed upon uniformly. This Bench is aware about the judicial function while dispensing justice that opportunity of hearing must be granted to all who are going to be affected by a judgement and that the fundamental rights, such as Civil rights be protected. Therefore, in the process of Insolvency we have taken due cognizance of the problem of the labourers/ workmen, which shall be dealt with at the time of approval of the Resolution Plan pending for consideration. This Bench shall examine the financial capacity of the Resolution Applicant and also consider the proposed settlement with other Claimants and only thereafter shall decide a fair and reasonable amount be disbursed to the members of this Labour Union. - MA 1259/2018 in C.P. (IB)-1262/(MB)/2017 - - - Dated:- 8-1-2019 - Shri M . K . Shrawat, Member ( Judicial ) For The For the Petitioner (s) : Mr. Sanjay Singhvi, Sr. Counsel And Ms. Karishma Rao (for Applicants) For The Respondent (s) : Mr. Rohan Rajadhyaksha, Mr. Babu Sivaprakasam, Mr. Dhrupad Vajliani, Mr. Abhileen Chaturvedi, Mr. Shyam Kapa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dispute of the Labourers to Industrial Tribunal. One more reference has been made that the Resolution Professional had filed an Affidavit before the Industrial Tribunal informing the commencement of Insolvency against the Corporate Debtor. Because of the said reason the RP has informed that the clauses of moratorium as prescribed U/s.14 of Insolvency Code shall apply, therefore, to be extended to the proceedings pending before Industrial Tribunal. 4) It has also been informed in this Application that the Workmen has submitted/ lodged their claim to the Resolution Professional in January 2018. Those claims were lodged for the period calculated up to December 2017. According to the applicant a Resolution Plan is under consideration by this Bench of NCLT, however, the Labourer/Workmen have not been given any chance to explain their claim before finalization of Resolution Plan. The grievance is that on one hand wages have not been paid since April 2010 and on the other hand it is not known to them about the fate of their lodgment of claim. 5) Hence it is pleaded that in the interest of natural justice the Resolution Professional be directed to be made a party in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x-parte decision therefore must not be forced upon a stakeholder by declaring the impugned decision as a binding decision on him. C) Next legal point as raised by the Learned Counsel is the scope of Civil Rights in the present circumstances when the rights enshrined under the Constitution cannot be exercised by a person then naturally he is going to be aggrieved by such a judicial decision of a court. According to the arguments it is not enough to be fair but it is equally important that a decision must seems to be fair . In support reliance was placed on the following case laws :- i) Hochtief Gammon v. Industrial Tribunal, Bhubaneshwar, Orissa and Others [AIR 1964 Supreme Court 1746 (V 51 C 243)] Order dated 01.04.1964; ii) H.L. Trehan And Others Versus Union of India and Others [(1989) 1 Supreme Court Cases 764] Order dated 20.08.1979; iii) D.K. Yadav Versus J.M.A. Industries Ltd. [(1993) 3 Supreme Court Cases 259] Order dated 07.05.1993; iv) Sahara India (Firm), Lucknow Versus Commissioner of Income Tax, Central-I and Another, [2008 14 Supreme Court Cases 151] Order dated 11.04.2008. 7) On the other hand, Learned Counsel Rohan Rajadhyaksha appearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A Resolution Plan shall demonstrate the steps to be taken for its effective implementation. Payment to workmen is always given a priority. The Resolution Applicant has, therefore, communicated an undertaking that the payments to workmen shall be given preference above any Financial Creditor. The conditions prescribed under Regulation 37 and under Regulation 38 of CIRP Regulation have duly been complied with by this Resolution Applicant. v) Undisputedly workmen have lodged their respective claims, which was examined and considered by the RP as well as by the CoC hence it is not fair to argue that the rights of those claimants have not been considered or in any manner it was an ex-parte decision which may prejudice their legal entitlement. vi) A Resolution Plan is considered after taking into account all the circumstances of the case especially the liquidated value of a Debtor Company. In this case as well, the liquidated value is lower than the value proposed by the Resolution Applicant. Only after considering the fact that the offer of the Applicant is better than the value if undergo liquidation, the Plan was accepted by the CoC. FINDINGS :- 8) Argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and more efficiently, comparing an ordinary procedure of trial. It is not that the rights of a claimant is not respected or protected. All legally permissible safeguards are required to be applied but with a caution of not causing delay . 9.2) Next, the learned Representative has drawn attention on the term satisfied used in Section 31 of The Code. This Bench is cautious about its judicial duty. While adjudicating upon a Resolution Plan and that before it s approval, a satisfaction is to be recorded in writing. While deciding the case of Raj Oil Mills [MA 35 of 2018 in CP No.1132/I BC/MB/MAH.2017], Order dated 19.04.2018, a finding in respect of the terminology Satisfaction is pronounced as under :- 9. The Procedure as prescribed under The Code is that a Resolution Plan is required to be submitted by a Resolution Application U/s 30 of The Code . On approval, the Resolution Professional is to submit U/s 30(6) the Resolution Plan, as approved by the Committee of Creditors, to the AA. Thereafter, u/s 31, as reproduced supra, AA is to examine the contents of the Resolution Plan. The mandate of this section is that if the AA is satisfied that the Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a universally accepted proposition of Law. 9.4) Next point raised is that the decision is binding upon the Corporate Debtor, its employees, members, guarantors and all stakeholders. The argument is that if it is binding upon the stakeholders as also on Workmen then they are also entitled for hearing so that their point can be addressed to the Court. At this juncture it is necessary to clarify that the formulation of a Resolution Plan is not an ex-parte procedure. A Resolution Professional is duty bound to call for Claims of all the stakeholders. This is the time when the voice of the stakeholders is listened by the RP. Not only this; on due consideration of the correctness of the Claim the RP is authorized to accept or modify the Claim. A due process of law is adopted at that point of time. All the claims lodged by the stakeholders is thoroughly examined by the Resolution Professional. If required, sometimes the presence of the Claimant is called for. The said claim is also communicated to a Resolution Applicant, who in turn, takes cognizance and if required amend its Plan. So, a conclusion can be drawn that once a chance has been given to Workmen to lodge their Claim th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This position of granting an opportunity by issuing a Notice has also been tackled in the provisions of Insolvency Code. It is important to refer Sec. 24 of the Insolvency Code wherein vide subsection (c), (3) of section 24 it is provided that the Resolution Professional shall give Notice of each meeting of the Committee of Creditors, and also to Operational Creditors or their Representatives if the amount of their aggregate dues is not less than 10% of the Debt. For ready reference relevant portion is reproduced below:- 24. Meeting of committee of creditors. ( 1) ( 2) ( 3) The resolution professional shall give notice of each meeting of the committee of creditors to- ( a) . ( b) . ( c) operational creditors or other representative if the amount of their aggregate dues is not less than 10 per cent. of the debt. Admitted position about the amount of workmen Debt is that their percentage is much less than 10% of the total Debt. As per the figures the Financial Creditors have lodged claim of ₹ 4264 Crore and Operational Creditors claim is approximately ₹ 6.6 Crore, however as against that, the emplo ..... 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