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TMI Blog2020 (10) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... F PHOENIX TRUST FY 16-15 SCHEME B) , M/S SOVEREIGN INFRASTRUCTURE DEVELOPERS LTD. [ 2020 (9) TMI 801 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] held that, rehearing and correction of the judgement passed by the Tribunal is impermissible in law. The ratio laid down in the said judgement is applicable to the case on hand. The reliefs sought are for interim payment to the employees of the Applicants Associations. There is no provision in the Code for payment to any creditors including these Applicants when the CIRP is under progress. Hence on that count also this Application has to fail - Application dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... e was rejected by the CoC due to lack of funds. 8. The Applicants submit that the NCLT Principal Bench on 11/06/2020 passed an order in I.A. No. 998 of 2019 preferred by R1, wherein auction of one of the properties of Jet Airways was ordered and the proceeds were permitted to be paid to R3 inter alia among others as resolved by CoC and the balance sums remaining from sale proceeds towards US Exim Bank. 9. The Applicants submit that they have preferred this Application on the ground that R1 & R2 in complete violation of Section 53 of the Code bypassed the water fall mechanism for distribution of proceeds from the sale of assets of the Corporate Debtor. The sale of the property of the Corporate Debtor amounts to partial liquidation of the Corporate Debtor. In such an event Section 53 of the Code provides the water fall mechanism wherein cost associated with the CIRP and Liquidation Process tops in the water fall mechanism followed by dues to workmen which shows that the Code intends to protect the interests of workmen and treats their claims as one of the top priority. 10. It is submitted that the RP is treating Jet Airways as a going concern, therefore, the Applicants are to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o that they be able to contribute necessary funds by the date set forth by this Bench. List the matter for further consideration on 19/02/2020." 12. The Applicants submit that the above observation by this Tribunal depicts the concern for the employees and their livelihood and it is expected from R1 & R2 to act upon immediately releasing some reasonable funds for the employees and to secure their livelihood until the Resolution Process is successfully completed. The Applicants submit that R1 & R2 not only conveniently ignored the order dated 08/01/2020 but also never pointed out this Order at the time of hearing of IA No. 998 of 2019 by the Principal Bench of this Hon'ble Tribunal. 13. The Applicants submit that they have no intention to create hurdle in the proposed auction process of the BKC property of Jet Airways as the Applicants believes that the same is in the best interest of Jet Airways. However, it is submitted that they have preferred this Application claiming a partial release of their salary from the sale proceeds ordered in the IA No. 998 of 2019. It is submitted that when a part of the amount of the proposed sale proceeds is distributed among the Applicants, no pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) It is pertinent to note that R3 had security interest over the second floor (partly), 3rd and 4th floor of the premises which is totally valued at around ₹ 600 Crores which was agreed to be given up by R3 as part of the settlement. In the absence of this settlement negotiated with R3, even in the event of liquidation of the Corporate Debtor, R3 would have been entitled under the Code to realise its security interest over the premises (valued at ₹ 600 Crores) and recovery of dues which would have only increased from ₹ 495 Crores as on June, 2020. At this stage R3 would have been required to pay for its share of workmen dues (for 24 months prior to liquidation commencement date), CIRP costs and Liquidation costs in accordance with the provisions of the Code and the Regulation there under. However, the aforesaid payment would have been paid from the realisation of the security interest over the premises for R3's claim at this stage which would have only increased from ₹ 495 Crores. In such a scenario by negotiating payment of ₹ 360 Crores against R3's claim of ₹ 495 Crores at this stage for securing the release of charge over the premises, it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy challenged by another employees' association and the same is pending before the Hon'ble NCLAT. b) There is no provision under the Insolvency and Bankruptcy Code, 2016 and the National Company Law Tribunal Rules, 2016 for review or reconsideration of the order passed by the Adjudicating Authority. c) The Hon'ble NCLAT in a recent Judgement dt. 17.09.2020, in the case of Deepakk Kumar Vs Phoenix ARC Pvt. Ltd and Another (MANU/NL/0347/2020), in Review Application No. 09 of 2020, held that, rehearing and correction of the judgement passed by the Tribunal is impermissible in law. The ratio laid down in the said judgement is applicable to the case on hand. d) The reliefs sought are for interim payment to the employees of the Applicants' Associations. There is no provision in the Code for payment to any creditors including these Applicants when the CIRP is under progress. Hence on that count also this Application has to fail. e) We are unable to accept the contention of the Applicants that this Tribunal can invoke Rule 11 of NCLT Rules 2016 for modifying the Order passed by this tribunal which is appealable and on which an appeal is pending before Hon'ble NCLAT. 19. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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