Tribunal Rejects Application Under Insolvency Code, Advises Appeal Process

The Tribunal rejected the application filed under Section 33 of the Insolvency and Bankruptcy Code, 2016, and Rules 11 and 32 of the National Company Law Tribunal Rules, 2016. The Tribunal advised the applicants to approach the appropriate forum under Section 42 of the I&B Code if aggrieved by the liquidator's decision. The Tribunal dismissed the specific prayers made by the applicants, allowing them to raise these issues in an appeal if necessary. The application was rejected with the liberty to file a fresh application under Section 42 of the Code if advised.

---

---

Issues Involved:
1. Impleadment of the Applicant as a Necessary Party.
2. Extension of Time for Workmen to Prefer Claims.
3. Inclusion of Nominee in the Stakeholders Consultation Committee.
4. Admission of Claims Based on Company Records.

Detailed Analysis:

1. Impleadment of the Applicant as a Necessary Party:
The applicant, Ex-Excel Glass Association, sought to be heard as a necessary party in the liquidation proceedings and requested that the debtor serve future reports/filings to their counsel. The Tribunal noted that the applicant association was formed to collectively represent the interests of 132 former workmen of the company in liquidation. However, the Tribunal found discrepancies in the association's membership details and concluded that the association was not clear on the number of workmen it represented. The Tribunal did not find it relevant to consider this prayer at the moment, as there is a provision for aggrieved parties to approach the Adjudicating Authority under Section 42 of the Insolvency and Bankruptcy Code (I&B Code).

2. Extension of Time for Workmen to Prefer Claims:
The applicant requested an extension of three months or until the disposal of the assets, whichever is earlier, for workmen to prefer their claims afresh. The Tribunal observed that the liquidator had already made a public announcement and processed claims from workmen/employees. The Tribunal emphasized that the liquidator must follow Regulation 19(4) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, which allows the liquidator to admit claims based on the corporate debtor's books of account if the workman or employee has not made a claim. The Tribunal held that the prayer for an extension could not be considered at this moment, as there is an open provision for aggrieved parties to appeal under Section 42 of the I&B Code.

3. Inclusion of Nominee in the Stakeholders Consultation Committee:
The applicant sought to replace the current workmen representative, Mr. Venugopal, with their nominee, Mr. Rajesh R, in the Stakeholders Consultation Committee. The applicant argued that Mr. Venugopal was part of the management and not eligible to represent the workmen. The Tribunal noted that the liquidator had received consent from Mr. P. A. Mathew Tharakan, the highest claimant in the modified list of stakeholders, to act as the representative. The Tribunal found that the liquidator had complied with Regulation 31A(4) of the IBBI (Liquidation Process) Regulations, 2019, and stated that the class of creditors could recommend a nominee as a representative of the workmen and employees. The Tribunal did not accept the applicant's prayer and directed them to approach the appropriate forum if aggrieved.

4. Admission of Claims Based on Company Records:
The applicant requested the liquidator to admit the amount due to each workman based on the company's books and records, irrespective of whether they had preferred a claim. The Tribunal reiterated Regulation 19(4) of the Liquidation Process Regulations, which allows the liquidator to admit claims based on the corporate debtor's books of account. The Tribunal noted that the liquidator had already processed claims and published the list of stakeholders. The Tribunal emphasized that aggrieved parties could appeal under Section 42 of the I&B Code if dissatisfied with the liquidator's decision.

Conclusion:
The Tribunal rejected the application filed under Section 33 read with Section 53 of the I&B Code, 2016, and Rules 11 and 32 of the National Company Law Tribunal Rules, 2016. The Tribunal held that the applicants could approach the appropriate forum under Section 42 of the I&B Code if aggrieved by the liquidator's decision. The Tribunal also dismissed prayers (a), (b), and (c), allowing the applicants to raise these issues while filing an appeal if advised. The IA filed by the applicant was rejected with liberty to file a fresh application under Section 42 of the Code if so advised.

---