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TMI Blog2024 (9) TMI 1323X X X X Extracts X X X X X X X X Extracts X X X X ..... e order dated 08.08.2019 cannot be read to be determination by the Adjudicating Authority of its jurisdiction to pronounce on the closure notice. It is well settled that after initiation of the CIRP all claims against the corporate debtor has to be filed and examined in the CIRP/ Liquidation Process. It has also come on the record that after liquidation proceedings, the claims were also filed by the Appellant before the liquidator and the liquidator has admitted their claims to the extent of Rs.1,09,70,698.27/-. The direction of the High Court dated 27.04.2019 cannot be read to mean that High Court adjudicated the issue as to whether NCLT can examine the challenge to the closure notice dated 31.07.2017. The order of the High Court, thus, has to be read to mean that Appellants were given liberty to raise their claims in the proceedings before the NCLT and raise all contentions. The mere fact that liberty was granted by the High Court to file claim and raised all contentions cannot be read to mean that High Court has adjudicated and directed that the closure notice dated 31.07.2017 be also adjudicated by the NCLT. From liberty to raise all contentions and issues are not akin to any d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ishaan Karki, Ms. Shivani K., Advocates For the Respondent : Mr. Abhishek Anand, Mr. Karan Kohli, Ms. Ridhima Mehrotra, Ms. Palak Kalra, Advocates JUDGMENT Ashok Bhushan, J. This Appeal by Era Labourer Union of SIDCUL, Pant Nagar has been filed challenging the order dated 02.04.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Court-V, New Delhi disposing of IA No.2545 of 2021 filed by the Appellant. Appellant aggrieved by this order has come up in this Appeal. 2. Brief background facts and sequence of events necessary to be noticed for deciding the Appeal are: - 2.1. Corporate Debtor- M/s. Apex Buildsys Limited had a factory in Pant Nagar in the State of Uttarakhand. Production of factory at Pant Nagar was closed from February 2017. The Corporate Debtor issued a transfer letter dated 20.06.2017 to the workmen, members of Appellant transferring their services to Nagpur Plant w.e.f. 01.07.2017. The Corporate Debtor declared a lockout on 31.07.2017 under the Uttar Pradesh Industrial Disputes Act, 1947 at the Pant Nagar unit of the Corporate Debtor. Notice dated 31.07.2017 was also sent to the Secretary, State of Uttarakhand, Labour Department, Dehradun infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of the consideration of the Resolution Plan, CoC thereafter was to take appropriate call. On 22.10.2019, CoC decided to liquidate the Corporate Debtor. The Appellant filed a claim of Rs.11,42,92,579/- out of which liquidator admitted an amount of Rs.1,09,70,698/-. The order dated 09.01.2020 directing for liquidation was also unsuccessfully challenged before this Tribunal where the Appeal was dismissed by this Tribunal on 12.01.2021. On 03.06.2021, in e-auction, the Corporate Debtor was sold as a going concern to an entity called Potens Transmission and Power Pvt. Ltd. which sale was however, cancelled by the NCLT. Appellant on 04.06.2021 has filed IA No. 2545 of 2021 praying for setting aside of the purported closure dated 31.07.2017 and consequent admission of claim for wages and bonus. In auction held on 23.05.2022, M/s. Jasamrit Designers Pvt. Ltd. was held as successful bidder and has procured the corporate debtor as a going concern. The application IA No.2545 of 2021 was heard by the Adjudicating Authority and by impugned order dated 02.04.2024 dismissed the IA which order is under challenge in this Appeal. 3. We have heard Ms. Bhargavi Kannan, Learned Counsel for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to raise all issues before the Adjudicating Authority. The view taken by the Adjudicating Authority that it has no jurisdiction to adjudicate upon the closure dated 31.07.2017 is incorrect. Section 60(5)(c) should be purposely constitute to enable the Adjudicating Authority to protect the interest of Appellant/ workmen. Purported closure dated 31.07.2017 is non-est and contrary to the law. Counsel in alternate submitted that in event the impugned order is not set aside, liberty may be given to the Appellant to approach the labour forum with regard to dispute raised in the present proceedings. Counsel for the Appellant in support of her submissions has relied on various precedents which we shall notice hereinafter. 5. Counsel for the liquidator refuting the submissions of the Counsel for the Appellant submits that the closure/lockout dated 31.07.2017 happened much before the commencement of the CIRP dated 20.09.2018. The closure/lockout which is unrelated to the insolvency process cannot be adjudicated by the Adjudicating Authority. The Appellant having filed its claim before the liquidator, the same was admitted partly by the liquidator. Claim of an amount of Rs.1,09,70,698.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer letter dated 20.06.2017 issued by the corporate debtor transferring the workmen to Nagpur factory and to report by 01.07.2017. The transfer letter is filed as Annexure A-3. Translated copy of which is as follows : - Dated: 20.06.2017 Name: Jagdish Singh S/o Shri Chanchal Singh Post: Electrician Employee No.E-242 Appointment date: 01.07.2011 Address: Village post Dhapola Sera District Vageshwar Subject: Transfer Letter Sir, As you know that there is no order for production in our Pantnagar factory and from the end of the January month there is no power supply because of which the production of our factory is closed from February 2017 the company and the factory are continuously going in loss. Hence continuing your service the company is transferring you from pant nagar factory to Nagpur factory, which is under Para No.12 of the employment letter issued to you by the company. Hence you are directed that you report in the Nagpur factory by 10 AM morning on 01.07.2017, if you fall to report in the Nagpur factory by 01.07.2017 then it will be deemed that you yourself is not interested in working with the company. Your sincerely SD/- (Ravi Saxena) (Assistant Manager- Human Resourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order dated 02.02.2018 came to be challenged before the High Court in subsequent W.P. No.462 of 2018. W.P. No.462 of 2018 was disposed of by the High Court noticing that proceedings under Section 7 of the IBC are pending before the NCLT where Appellant may raise all their contentions including the settlements of their charge in relation to the salary and wages before the NCLT. In paragraphs 9, 10 and 11, High Court in its judgment dated 27.04.2019 issued following directions:- 9. After having heard the learned counsel for the parties, the fact pertaining of the inception of the proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 and its pendency before the National Company Law Tribunal is not disputed by the parties to the writ petition. In such an eventuality, when the question of liquidation and the settlement of liabilities due to be paid by the respondent company under any head of liability, they are to be settled as a consequence of the proceedings, which are pending before the National Company Law Tribunal, thus District magistrate opined that it would be inappropriate for the writ Courts to pass any order so far an action, which has been put to challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... call and thereafter the CoC to look into. However, no Resolution Plan having been approved, the liquidation was subsequently directed on 09.01.2020. There was no determination with regard to notice dated 31.07.2017. At this stage, we may notice one submission of the Appellant that the Adjudicating Authority earlier in its order dated 08.08.2019 has assumed jurisdiction to decide correctness of notice dated 31.07.2017, it cannot subsequently take the view that it has no jurisdiction to adjudicate on notice dated 31.07.2017. The order dated 08.08.2019 has already been extracted above from which it is clear that the Adjudicating Authority has not taken any decision and has not expressed any view that the Adjudicating Authority has jurisdiction to adjudicate the notice dated 31.07.2017. What is recorded in the order is the statement made by the Resolution Professional. Hence, the order dated 08.08.2019 cannot be read to be determination by the Adjudicating Authority of its jurisdiction to pronounce on the closure notice. 13. Counsel for the Appellant has also placed reliance on the judgment of the High Court of Uttarakhand and the Hon ble Supreme Court which we shall notice hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal or in appellate proceedings. Accordingly, we are not inclined to issue notice in the writ petition, but we leave it open to the petitioner to raise the grievance, if any, in accordance with law, after the decision of the appellate tribunal. Recording the aforesaid observations, the writ petition is dismissed. We clarify having not expressed any opinion on merits. 15. The above order indicate that the Hon ble Supreme Court did not issue any notice in the Writ Petition but left it open to the petitioner to raise all contentions and issues before the NCLT or an Appellate proceedings. From liberty to raise all contentions and issues are not akin to any direction or adjudication that issue pertaining to challenge to the closure notice has to be undertaken by the NCLT. The above order of the Hon ble Supreme Court does not in any manner support the submission of the Appellant that NCLT has to adjudicate on the closure notice dated 31.07.2017. We, thus, are of the view that neither of the judgment of the High Court of Uttarakhand or the Judgment of the Hon ble Supreme Court can be read to mean that after an adjudication, the High Court or the Supreme Court has held hat question of clos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnataka. A Writ Petition moved before the High Court. High Court relegated the matter to the Tribunal for decision on merit after giving opportunity to the State. NCLT subsequently allowed the application setting aside the order rejecting and directed the Government to execute supplementary lease deed which was again challenged before the High Court. High Court stayed the operation of the order of the Tribunal against which order the Resolution Professional and the CoC has filed the Appeals before the Hon ble Supreme Court. In the above context, the issue of jurisdiction of the NCLT came for consideration. The Hon ble Supreme Court held that the NCLT would have no jurisdiction to question the decision taken by the Government under MMDR Act 1957. In paragraphs 36 and 45, following has been laid down:- 36. From a combined reading of Sub-section (4) and Subsection (2) of Section 60 with Section 179, it is clear that none of them hold the key to the question as to whether NCLT would have jurisdiction over a decision taken by the government under the provisions of MMDR Act, 1957 and the Rules issued there-under. The only provision which can probably throw light on this question would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the judgment of the Hon ble Supreme Court in Tata Consultancy Services Limited vs. Vishal Ghisulal Jain, Resolution Professional, SK Wheels Pvt. Ltd.- Civil Appeal No. 3045 OF 2020 . The Hon ble Supreme Court had again occasion to consider the residuary jurisdiction of the Adjudicating Authority. It was held that it cannot be invoked on the grounds not related to the insolvency of the corporate debtor. In paragraphs 25 and 26, the Hon ble Supreme Court has laid down following:- 25. Before the initiation of the CIRP, the appellant had on multiple instances communicated to the Corporate Debtor that there were deficiencies in its services. The Corporate Debtor was put on notice that the penalty and termination clauses of the Facilities Agreement may be invoked. This is evident from the appellant's communications dated 1 August 2018, 17 September 2018, 1 October 2018 and 11 October 2018. In its email dated 13 October 2018 the appellant specifically noted that the housekeeping staff being provided by the Corporate Debtor was inadequate. The appellant was apparently constrained to deploy its own staff for housekeeping, evinced from its email dated 19 November 2018. The Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 31.07.2017. 20. Counsel for the Appellant has placed reliance on various judgments of the Hon ble Supreme Court, High Court and this Tribunal. It is contended that the liquidator vide e-mail dated 23.03.2020 intimated that claim of Rs.1,09,70,698/- has been admitted. Details of the claim, accepted and reason for rejection were communicated in tabular form. The submission is that the Adjudicating Authority in the impugned order has observed that the claim for period post closure notice dated 31.07.2017 could not be verified by the liquidator as the business operations were suspended which reason was not communicated by the Liquidator and the earlier Resolution Professional informed that the claims post closure are admitted on contingent basis subject to a decision by a Competent Authority. Appellant relying on the judgment of the Hon ble Supreme Court in Mohinder Singh Gill and Anr. V. The Chief Election Commissioner, New Delhi and Anr.- (1978) 1 SCC 405 submits that no new reasons can be given by the Statutory Authority to support his decision. There can be no quarrel to the proposition of law laid down by the Hon ble Supreme Court in Mohinder Singh Gill . In the present case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We, keeping inn view the fact, that on the one hand the appellant did not join his posting at Ahmedabad, although no order of stay was passed and on the other wholly unwarranted and reprehensible conduct on the part of the authorities of the respondents, are of the opinion that interest of justice would be subserved if during the period from 28.12.2005 fill his joining his post at Bhopal, the appellant is treated to be on leave and the respondents are directed to pass an appropriate order invoking the leave rules applicable in this behalf. It is ordered accordingly. 23. The above case has no application in the present case since transfer order dated 20.06.2017 has never been held to the illegal by any Competent Authority. The case of Somesh Tiwari (supra) has no application. 24. Counsel for the Appellant in support of her submission that Section 60(5)(c) of the IBC need to be broadly construed, has also relied on various judgments including judgments of this Tribunal and High Court of Gujarat to support that this Tribunal in several case had decided the issue under Section 60(5)(c). Reliance has been placed on Mr. Hemant Mehta vs. Asst. Commissioner of State Tax Ors.- Company Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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