Claim of Employees/Workmens

Whether claim under Section 14B of Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 assessed subsequent to the initiation of CIRP can be admitted in CIRP? – Employees Provident Fund Organization Vs. Rajat Mukherjee, Liquidator of Enviiro Bulkk Handling Systems Pvt Ltd. – NCLAT New Delhi

When the entire claim which was filed under 7A and 7Q of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 was paid to the Employees Provident Fund Organization (appellant), Hon’ble Appellate Tribunal fails to see any error in the order of the Adjudicating Authority in rejecting the application. It has been noticed by the Adjudicating Authority that claim under Section 14B was assessed by an order dated 16.6.2021 passed after initiation of CIRP proceedings. Adjudicating Authority has noted the judgment of this Tribunal in Regional Provident Fund Commissioner, Vatwa, EPFO vs. Manish Kumar Bhagat (2023) ibclaw.in 662 NCLAT which has rightly been relied upon for not accepting the claim which was subsequent to the initiation of CIRP.

Whether claim under Section 14B of Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 assessed subsequent to the initiation of CIRP can be admitted in CIRP? – Employees Provident Fund Organization Vs. Rajat Mukherjee, Liquidator of Enviiro Bulkk Handling Systems Pvt Ltd. – NCLAT New Delhi Read Post »

The timelines as stipulated in the IBC need to be considered as of Directory nature and not as Mandatory in nature – Vikram Laxman Pawar Vs. Mr. Sripatham Venkatasubramaniam Ramkumar, RP of Privilege Industries Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that it may also be worth considering that although the timeline as stipulated in the Code are sacrosanct and important and sometime critical for resolution of the Corporate Debtor in order to achieve the maximization of value of all the stakeholders, the timelines need to be considered as of directory nature and not as mandatory in nature.

The timelines as stipulated in the IBC need to be considered as of Directory nature and not as Mandatory in nature – Vikram Laxman Pawar Vs. Mr. Sripatham Venkatasubramaniam Ramkumar, RP of Privilege Industries Ltd. – NCLAT New Delhi Read Post »

A Resolution Plan cannot be rejected by Adjudicating Authority simply on the objection of an Operational Creditors being Employees that they are being paid a meagre amount against his admitted claim – Mr. Vidyadhar Vasant Pawanaskar Vs. Mr. Ganesh L. Jain & Anr. – NCLT Mumbai Bench

An application is filed by the employees of the Corporate Debtor under Section 60(5) of IBC, 2016 r/w Rule 11 of NCLT, 2016 seeking stay to the Resolution Plan and to reconstitute the CoC.
NCLT Mumbai Bench held that:
(i) The IA filed by the Applicant has no merit and the same liable to be dismissed as the Applicant in the instant Application have no locus to challenge the constitution of CoC.
(ii) The Resolution Plan cannot be rejected by the Adjudicating Authority simply on the objection of an Operational Creditors being Employees that they are being paid a meagre amount against his admitted claim so long as it does not contravene the provisions of Section 30 (2) (b) of the Code, which is not the case in the instant IA.

A Resolution Plan cannot be rejected by Adjudicating Authority simply on the objection of an Operational Creditors being Employees that they are being paid a meagre amount against his admitted claim – Mr. Vidyadhar Vasant Pawanaskar Vs. Mr. Ganesh L. Jain & Anr. – NCLT Mumbai Bench Read Post »

NCLT dismisses application u/s 9 filed by Managing Director of a Corporate Debtor for initiating CIRP against the Corporate Debtor – Anup Jhunjhunwal Vs. Adea Powerquips Pvt. Ltd. – NCLT Kolkata Bench

The Adjudicating Authority relied on the judgment of Hon’ble Supreme Court in the matter of Mobilox judgment and hedl that there has been a pre-existing dispute in the matter and therefore C.P (IB) No. 2058/KB/2029 is rejected. Needless to say that the Operational Creditor is at liberty to resort to other remedies that may be available to it under any other law.

NCLT dismisses application u/s 9 filed by Managing Director of a Corporate Debtor for initiating CIRP against the Corporate Debtor – Anup Jhunjhunwal Vs. Adea Powerquips Pvt. Ltd. – NCLT Kolkata Bench Read Post »

If workers are not specifically includes in the list of Stakeholders, under Liquidation Regulation 31, they cannot be made a part of the SCC under Regulation 31A(1) of Liquidation Process Regulations – Varrsana Employee Welfare Association Vs. Anil Goel, The Liquidator of Varrsana Ispat Ltd. – NCLAT New Delhi

NCLAT held that Regulation 31A flows from 31 and has to be read together and interpreted in its truest sense keeping the objective of the Code. Read congruously, Regulations 31 & 31A specify that when the Employees have no subsisting Claim, they cannot be included in the list of Stakeholders, thereby meaning that if the Workers are not specifically includes in the list of Stakeholders, under Regulation 31, they cannot be made a part of the SCC under Regulation 31A(1).
It also held that Claim of Gratuity is payable only at a future date in the happening of any event like retirement, resignation, termination, death, etc., and therefore, it cannot be construed as a Claim subsisting to be included in the list of Stakeholders and consequently seeking a place in the SCC.

If workers are not specifically includes in the list of Stakeholders, under Liquidation Regulation 31, they cannot be made a part of the SCC under Regulation 31A(1) of Liquidation Process Regulations – Varrsana Employee Welfare Association Vs. Anil Goel, The Liquidator of Varrsana Ispat Ltd. – NCLAT New Delhi Read Post »

Workmen and Employees are entitled for payment of full amount of Provident Fund and Gratuity till the date of commencement of the insolvency – Jet Aircraft Maintenance Engineers Welfare Association Vs. Ashish Chhawchharia RP of Jet Airways (India) Ltd. & Ors. – NCLAT New Delhi

Following questions arise for consideration in this case:

I. What is the extent and the limitation of the judicial review by the Adjudicating Authority and the Appellate Tribunal in context of a Resolution Plan approved by the CoC with requisite majority?

II. Whether the workmen and employees are entitled to receive the payment of provident fund, gratuity and other retirement benefits in full since they are not part of the liquidation estate under Section 36(4)(b)(iii) of the Code?

III. Whether the workmen and employees are entitled to receive their dues from the Corporate Debtor as per the provisions of the Code i.e. the minimum liquidation value envisaged under Section 30(2)(b) by referring to waterfall mechanism provided under Section 53(1) of the Code?

IV. Whether the Resolution Plan approved by the Adjudicating Authority violates the provisions of Section 30(2)(b) of the Code since it does not provide the minimum amount to the workmen/ employees as contemplated under Section 30(2)(b)?

V. Whether the Resolution Plan as approved by the Adjudicating Authority violates provisions of Section 30(2)(e) of the Code since it contravenes provisions of Industrial Disputes Act, 1947 it having not provided for retrenchment compensation to the workmen/employees who were so entitled under Section 25-F and 25-FF of the Industrial Disputes Act, 1947 and other legislations?

VI. Whether the demerger of entire workforce except of 50 employees as Asset Protection Team to AGSL is illegal and contrary to the provision of Section 25-FF of Industrial Disputes Act, thus, violates Section 30(2) of the Code?

VII. Whether the workmen/employees are entitled for payment of Rs.750 crores (or more) as CIRP cost subsequent to insolvency commencement date they being on the roll of the Corporate Debtor and principle of no work no pay could not have been applied by the Resolution Professional?

VIII. Whether for computing the payment to secured financial creditors under Section 53(1)(b) only the value of their security interest has to be taken into consideration or their entire financial debt is to be considered while computing their entitlement?

IX. Whether the Resolution Plan being contingent and conditional ought not to have been approved in view of the law laid down by the Hon’ble Supreme Court in “Ebix Singapore Pvt. Ltd. Vs. CoC of Educomp Solutions Ltd. & Anr., (2022) 4 SCC 401”?

X. Whether the allocation of fixed amount of Rs.15,000/- each to the Operational Creditors (other than workmen/employees) in the resolution plan can be held to be fair and equitable and deserves no interference by this Appellate Tribunal?

XI. Whether the claim of Regional Provident Fund Commissioner verified to the extent of Rs.24,40,65,594/- arising out of an order dated 17.10.2018 passed under Section 14B of Employees’ Provident Funds & Miscellaneous Provisions Act 1952 can be treated as secured debt and the Appellant was entitled to receive the amount as secured creditors?

XII. Whether the claim of Department of State Tax which was submitted within time created a charge in favour of the Department on the assets of the Corporate Debtor by virtue of operation of law and the State Tax Department has the security interest and is a secured creditor?

XIII. Reliefs, if any, to which the appellants are entitled?

Workmen and Employees are entitled for payment of full amount of Provident Fund and Gratuity till the date of commencement of the insolvency – Jet Aircraft Maintenance Engineers Welfare Association Vs. Ashish Chhawchharia RP of Jet Airways (India) Ltd. & Ors. – NCLAT New Delhi Read Post »

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