Tribunal Denies Applicants' Prayers, Directs Liquidator to Proceed with Asset Sale

The Tribunal denied the applicants' prayers for regular payment of dues, injunction against closing the Dharwad plant, and restraining termination of the agreement with JMPL. It also dismissed the request for an independent investigation into the liquidator's conduct. The Tribunal directed the liquidator to proceed with the sale of company assets as per the Insolvency and Bankruptcy Code, following the Supreme Court's decision lifting the stay on asset confirmation. The Registry was ordered to provide an update on progress by 17.07.2021.

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Issues Involved:
1. Payment of dues to workers and employees.
2. Injunction against closing operations of the Dharwad plant.
3. Termination of the agreement with Jeju Metals Private Limited (JMPL).
4. Appointment of an independent agency to investigate the conduct of the liquidator.

Detailed Analysis:

Issue 1: Payment of Dues to Workers and Employees
The applicants, employees of Gujarat NRE Coke Limited at the Dharwad plant, claimed non-payment of salaries and wages, especially during the COVID-19 pandemic. They argued that despite regular attendance and the liquidator receiving payments from JMPL, their dues were not settled. The liquidator contended that payments were made till September 2020, but cash flow issues limited further disbursements. The Tribunal found that the liquidator had made reasonable efforts to pay the workers, given the financial constraints of the company, and therefore, prayer (a) for regular and timely payment of dues could not be granted at this stage.

Issue 2: Injunction Against Closing Operations of the Dharwad Plant
The applicants sought to restrain the liquidator from closing the Dharwad plant. The liquidator argued that the plant was commercially unviable, and continuing operations would exacerbate financial losses. The Tribunal noted that the liquidator had taken steps to keep the plant operational but found the unit unviable due to high expenses and low revenue. The Tribunal held that hard decisions, including closing unviable units, are necessary and aligned with the objectives of the Insolvency and Bankruptcy Code (IBC). Hence, prayer (b) to restrain the liquidator from closing the Dharwad plant was denied.

Issue 3: Termination of the Agreement with JMPL
The applicants challenged the termination of the processing agreement with JMPL, arguing it was detrimental to the workers' interests. The liquidator justified the termination due to JMPL's failure to make timely payments and its financial instability. The Tribunal observed that the contract termination was a commercial decision within the liquidator's purview and noted that JMPL did not contest the termination. It concluded that the workers could not use their position to challenge the contract termination on behalf of JMPL. Thus, prayer (c) to restrain the liquidator from terminating the agreement with JMPL was not granted.

Issue 4: Appointment of an Independent Agency to Investigate the Conduct of the Liquidator
The applicants requested an investigation into the liquidator's conduct, alleging mismanagement. The liquidator defended his actions as being in good faith and within legal bounds. The Tribunal found no allegations of fraud or bias and emphasized that insolvency professionals must be able to make independent decisions without undue interference. Therefore, prayer (d) for appointing an independent agency to investigate the liquidator's conduct was dismissed.

Conclusion:
The Tribunal dismissed IA No. 865/KB/2020, directing the liquidator to proceed with the sale of the company's assets as per section 33 of the IBC, now that the stay on asset confirmation was lifted following the Supreme Court's final decision. The Registry was instructed to report further progress on 17.07.2021.

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