Trade Union Appeal Dismissed: Individuals Can Assert Claims in Insolvency Proceedings

The Tribunal dismissed the appeal by JK Jute Mill Mazdoor Morcha, ruling that the application under Section 9 of the Insolvency & Bankruptcy Code was not maintainable for a Trade Union. However, individual workmen or employees were granted liberty to assert their claims if there is a debt and default, with the decision not barring individual claims in future insolvency proceedings.

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Issues Involved:
1. Maintainability of an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 by a Workmen Association.
2. Definition and scope of 'Operational Creditor' under the I&B Code.
3. Pre-existing disputes and their impact on the maintainability of the application.
4. Procedural requirements for filing an application under Section 9 of the I&B Code.
5. The role and claims of interveners in the insolvency proceedings.

Issue-wise Detailed Analysis:

1. Maintainability of an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 by a Workmen Association:
The primary question addressed was whether a Workmen Association can file an application under Section 9 of the I&B Code. The Tribunal concluded that the application under Section 9 at the instance of the Appellant - JK Jute Mill Mazdoor Morcha - is not maintainable. It was held that while individual workmen or employees who have rendered services to the corporate debtor can be considered 'operational creditors', a Trade Union or Workmen Association does not fall within this definition as they do not provide services directly to the corporate debtor.

2. Definition and scope of 'Operational Creditor' under the I&B Code:
The Tribunal examined the definitions under Section 5(20) and 5(21) of the I&B Code. It was determined that an 'operational creditor' is a person to whom an operational debt is owed due to the provision of goods or services, including employment. However, the Trade Union itself does not render any service to the corporate debtor and therefore cannot be considered an 'operational creditor'. The Tribunal emphasized that a workman or employee individually can be an 'operational creditor' if they have a claim due to services rendered.

3. Pre-existing disputes and their impact on the maintainability of the application:
The Tribunal noted that there were pre-existing disputes between the parties, including pending civil suits and writ petitions. It was highlighted that where there is a pre-existing dispute, as established in the case of "Kirusa Software Pvt. Ltd. v. Mobilox Innovations Pvt. Ltd.", an application under Section 9 is not maintainable. The Tribunal also mentioned that the Appellant had not provided the necessary certificate from a financial institution, which is a mandatory requirement under Section 9.

4. Procedural requirements for filing an application under Section 9 of the I&B Code:
The Tribunal reiterated that an application under Section 9 must be filed individually by the operational creditor and not jointly. Each workman or employee must issue an individual claim notice under Section 8 and provide detailed particulars of their claim, including the amount due, period of service, and date of default. The Tribunal referenced the case of "Uttam Galva Steels Limited V. DF Deutsche Forfait AG & Anr" to support the requirement for individual applications.

5. The role and claims of interveners in the insolvency proceedings:
The Tribunal acknowledged the claims of the interveners, who were members of different Trade Unions and legal heirs of deceased workers. These interveners claimed dues for wages, overtime, provident fund, gratuity, and other benefits. The Tribunal noted that each workman or employee has a separate cause of action, and their claims must be individually assessed. It was emphasized that once the corporate insolvency resolution process is initiated, other creditors, including workmen and their legal heirs, can file their claims before the Insolvency Resolution Professional.

Conclusion:
The Tribunal dismissed the appeal filed by JK Jute Mill Mazdoor Morcha, holding that the application under Section 9 was not maintainable at the instance of the Trade Union. However, it granted liberty to individual workmen or employees to raise their claims if there is a debt and default. The Tribunal also clarified that this decision does not preclude individual claims from being considered in future insolvency proceedings.

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