2019 (11) TMI 1649 - AT - Insolvency and Bankruptcy

Appeal declined by Tribunal, explore legal remedies post moratorium. Adhere to timelines to avoid liquidation.

The appeal was declined by the Appellate Tribunal, with the Appellants advised to pursue their legally available remedies through the appropriate channels ... Seeking approval of the Resolution Plan - Adjudicating Authority observed that in the main petition Resolution Plan was pending for approval and thus claim now tendered by the Appellants could not be considered - HELD THAT:- When Public Notice was issued, whoever is eligible and wants to file claim, can file the claim with IRP/RP in prescribed form. After Resolution Plan has already been submitted, such claims cannot be accepted. The process cannot be reversed in a manner that clock is set back. Such actions can lead the Company into liquidation. The option for the Appellant is to take help of Section 60(6) of Insolvency and Bankruptcy Code, 2016 and may resort to appropriate remedy in appropriate forum - The appeal shows that the Appellants have already taken up the issue with the Commissioner of Labour who has issued Certificate of Recovery on 04.07.2019. The Appellants can pursue their legally available remedies, which they have already adopted, after further developments in the proceeding pending before the Adjudicating Authority and end of moratorium. Appeal disposed off. Issues: Delay in appeal, Admittance of claim by employees during Corporate Insolvency Resolution Process, Consideration of claim after Resolution Plan approval, Applicability of Section 60(6) of Insolvency and Bankruptcy Code, 2016.Delay in Appeal:The judgment addresses a delay of 14 days in preferring the appeal, which was condoned by the Appellate Tribunal based on the reasons provided by the Appellant. The delay was found acceptable, and the corresponding application was disposed of.Admittance of Claim by Employees during CIRP:The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor had been initiated, and a Resolution Professional was appointed. The Resolution Plan was approved, and during this process, employees of the Corporate Debtor submitted a claim after the last date for completion of CIRP. However, the Resolution Professional contended that claims could only be admitted within 90 days from the start of CIRP proceedings, and as the claims were submitted after the Resolution Plan approval, they could not be considered.Consideration of Claim after Resolution Plan Approval:The Adjudicating Authority observed that claims tendered by the employees post-Resolution Plan submission could not be entertained. The Appellants argued that they were unaware of the CIRP process, claiming to be continuous workmen present on working days. However, the Tribunal held that claims should have been filed during the stipulated period and could not be accepted after the Resolution Plan submission to avoid potential liquidation.Applicability of Section 60(6) of Insolvency and Bankruptcy Code, 2016:The Tribunal suggested that the Appellants explore Section 60(6) of the Insolvency and Bankruptcy Code, 2016, and seek appropriate remedies in the relevant forum. It was emphasized that the legal options available to the employees, including pursuing remedies with the Commissioner of Labour, should be utilized after the conclusion of the moratorium period.In conclusion, the appeal was declined by the Appellate Tribunal, with the Appellants advised to pursue their legally available remedies through the appropriate channels post the conclusion of the proceedings before the Adjudicating Authority and the end of the moratorium period.