Joint Section 9 filing by workmen through an authorised representative upheld; default and compliance triggered insolvency admission.
Workmen and employees, as operational creditors, may file a Section 9 insolvency application jointly through a duly authorised representative where the application forms permit such collective filing. The minimum threshold objection failed because at least one claimant's debt met the statutory minimum. Where default in payment of wages was established, along with service of demand notice and supporting declarations and bank certificate, the insolvency application was admitted. In the absence of a proposed insolvency resolution professional, an interim resolution professional was appointed and corporate insolvency resolution process commenced with moratorium and other statutory consequences.
Issues: (i) whether workmen/employees, as operational creditors, could validly file a Section 9 application in a joint capacity through an authorised representative; (ii) whether the operational debt, default, and statutory compliances justified admission of the insolvency application and initiation of corporate insolvency resolution process.
Issue (i): whether workmen/employees, as operational creditors, could validly file a Section 9 application in a joint capacity through an authorised representative.
Analysis: The application forms contemplated filing by workmen/employees either individually or jointly through one duly authorised person. The group of workmen had authorised one of them through power of attorney to issue notice and present the petition. The objection based on collective filing was therefore not accepted. The minimum threshold objection was also negatived since at least one applicant's claim exceeded the statutory minimum required for filing.
Conclusion: The joint filing was held maintainable and the threshold objection failed.
Issue (ii): whether the operational debt, default, and statutory compliances justified admission of the insolvency application and initiation of corporate insolvency resolution process.
Analysis: The Authority found that the corporate debtor had defaulted in payment of the wages determined by the competent authority. The record also showed compliance with the demand notice requirement and the supporting declarations and bank certificate required for a Section 9 petition. Since no insolvency resolution professional had been proposed, an IRP was required to be appointed and the statutory consequences under the Code were attracted.
Conclusion: The application was admitted, corporate insolvency resolution process was initiated, moratorium was declared, and an interim resolution professional was appointed.
Final Conclusion: The petition succeeded, resulting in commencement of insolvency proceedings against the corporate debtor with all statutory consequences under the Code.
Ratio Decidendi: Where workmen are operational creditors, a Section 9 application may be filed jointly through a duly authorised representative, and once default and statutory compliance are established, the application is to be admitted and corporate insolvency resolution process commenced.
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