Central Government Tribunal Confirms Jurisdiction & Protects Shareholder Rights under Insolvency Law

The court upheld the jurisdiction of the Central Government Industrial Tribunal cum Labour Court, confirming Rubber Wood India Private Limited's status as controlled by the Central Government. It directed workmen to file claims with the Interim Resolution Professional under the Insolvency and Bankruptcy Code, protecting the shareholder (Rubber Board) from being individually liable in disputes under the Industrial Disputes Act. The court's decision disposed of the second writ petition while clarifying the roles and liabilities of the parties involved.

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Issues Involved:
1. Jurisdiction of the Central Government Industrial Tribunal cum Labour Court.
2. Status of Rubber Wood India Private Limited as controlled by the Central Government.
3. Reference of disputes to the Central Tribunal.
4. Role and claims of workmen under the Insolvency and Bankruptcy Code, 2016.
5. Liability of a shareholder in disputes under the Industrial Disputes Act.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Central Government Industrial Tribunal cum Labour Court:
The primary contention in both writ petitions revolves around the jurisdiction of the Central Government Industrial Tribunal cum Labour Court. The petitioners argue that the Central Tribunal lacks jurisdiction as Rubber Wood India Private Limited is not controlled or managed by the Central Government. The court examined the definitions of 'appropriate Government' under Section 2(a) of the Industrial Disputes Act, 1947, and concluded that the Central Government has the authority to refer disputes to the Central Tribunal if the industry is carried on by or under the authority of the Central Government.

2. Status of Rubber Wood India Private Limited as controlled by the Central Government:
The court analyzed whether Rubber Wood India Private Limited, the first petitioner in the second writ petition, is controlled and managed by the Central Government. It referred to Section 4 of the Rubber Act, 1947, and the Memorandum and Articles of Association of Rubber Wood India Private Limited. The court found that the company is an instrumentality of the Central Government, with significant control exercised by the Rubber Board, which holds more than 76% of the shares and has the power to appoint directors and the chairman.

3. Reference of disputes to the Central Tribunal:
The court upheld the reference of disputes to the Central Tribunal by the Central Government, as stated in the order dated 09.01.2020. The court found that the reference was legal and justified based on the facts and circumstances of the case. The court rejected the argument that the State Government should be the appropriate authority to refer the matter to the Labour Court.

4. Role and claims of workmen under the Insolvency and Bankruptcy Code, 2016:
The court addressed the issue of whether the reference to the Central Tribunal should continue after the appointment of the Interim Resolution Professional under the Insolvency and Bankruptcy Code, 2016. The court referred to Sections 10, 13, and 18 of the Code and Regulation 9 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The court directed the workmen to file their claims before the Interim Resolution Professional and instructed the professional to adjudicate the claims as per the regulations.

5. Liability of a shareholder in disputes under the Industrial Disputes Act:
The court examined whether a shareholder, specifically the Rubber Board, could be made a party to the proceedings under the Industrial Disputes Act. The court concluded that a shareholder cannot be independently made a party for adjudication of disputes. The court clarified that the notice dated 09.01.2020 should be construed as a claim against the company and not against the shareholder. The court allowed the first writ petition in these terms, protecting the Rubber Board from being dragged into litigation unnecessarily.

Conclusion:
The court disposed of the second writ petition by directing the workmen to file their claims before the Interim Resolution Professional and adjudicated the first writ petition by clarifying that the shareholder (Rubber Board) cannot be made a party to the dispute. The court upheld the jurisdiction of the Central Tribunal and confirmed the status of Rubber Wood India Private Limited as controlled by the Central Government.

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