Appeal Dismissed, Resolution Plan Approved, Workers' Claims Partially Accepted

The appeal was dismissed by the Tribunal, upholding the order rejecting the application for Corporate Insolvency Resolution Process initiation. The Resolution Plan submitted by Gloster Limited for Fort Gloster Industries Ltd. was approved by the Committee of Creditors with a 73.21% vote share. Trade unions' claims for gratuity and leave liability were partially accepted, allocating funds for workmen's claims. Allegations of discrimination among employees in claim satisfaction were dismissed, citing lack of substantiated evidence. The Tribunal found that the appellants did not comply with procedural regulations for claims, leading to the dismissal of the appeal.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP).
2. Invitation and evaluation of Expression of Interests (EOIs) and Resolution Plans.
3. Approval of the Resolution Plan by the Committee of Creditors (CoC).
4. Claims by trade unions for gratuity and leave liability.
5. Discrimination among employees in claim satisfaction.
6. Compliance with procedural regulations for claims by workmen/employees.

Summary:

1. Initiation of CIRP:
Jayanta Kumar Panja, an ex-employee of Fort Gloster Industries Limited (Corporate Debtor), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code) for initiation of CIRP due to default in payment of Rs.1,13,946/- towards his gratuity. The application was admitted by the Adjudicating Authority (NCLT, Kolkata) on 09.08.2018, and Manish Jain was appointed as the Interim Resolution Professional (IRP), later replaced by Bijay Murmuria as the Resolution Professional (RP).

2. Invitation and Evaluation of EOIs and Resolution Plans:
The RP published form-G on 05.02.2019 inviting EOIs, receiving responses from Prudent ARC Limited and Gloster Limited by 20.02.2019. M/s Hooghly Infrastructure Pvt. Ltd. also filed an EOI, allowed by the Adjudicating Authority on 01.04.2019. Two resolution plans were received from M/s Gloster Limited and M/s Hooghly Infrastructure Pvt. Ltd. by 06.04.2019. A forensic audit by V. Singhi & Association found no preferential or fraudulent transactions. The CoC, in its 6th meeting, noted inconsistencies in Hooghly Infrastructure's plan. Both applicants updated their plans by 19.04.2019, with Gloster Limited scoring higher in the evaluation matrix and being declared H1 bidder. The resolution plan of Gloster Limited was approved by 73.21% voting in favor.

3. Approval of the Resolution Plan by CoC:
The RP filed an application under Section 30(6) of the Code for approval of the resolution plan of Fort Gloster Industries Ltd. submitted by Gloster Limited, approved by the CoC with a 73.21% vote share.

4. Claims by Trade Unions for Gratuity and Leave Liability:
The appellants, various trade unions, filed an application under Section 60(5) of the Code on 06.05.2019, seeking payment of gratuity and leave liability for employees up to 31.08.2018, claiming Rs. 60,22,33,718/-. The Adjudicating Authority found that claims of 11 employees totaling Rs. 0.89 Crore were received within the stipulated period, and claims of four workmen submitted beyond 90 days were also admitted. The resolution plan allocated Rs. 1.30 Crore for workmen's claims and provided for 20% payment of unclaimed dues of Rs. 12.78 Crore.

5. Discrimination Among Employees in Claim Satisfaction:
Counsel for the appellants argued that similarly situated employees were discriminated against, as claims of 11 employees were satisfied while nothing was allocated for the appellants. The Adjudicating Authority dismissed this claim, observing that the unions' claims were not substantiated with supporting materials.

6. Compliance with Procedural Regulations for Claims by Workmen/Employees:
The respondents argued that the appellants did not comply with the prescribed procedure under Regulation 9 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The claims were not filed in Form-D or Form-E as required, and no documentary evidence was provided to substantiate the claims. The Adjudicating Authority found that the RP had satisfied the claims of employees who filed in accordance with the regulations and had made provisions for future claims.

Conclusion:
The appeal was dismissed, with the Tribunal finding no illegality in the order dismissing the application CA (IB) No. 650/KB/2019. The appellants' claims were not filed in compliance with the procedural regulations, and the RP had adequately addressed the claims of employees who followed the prescribed process.

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