2025 (3) TMI 909 - AT - IBC

IRP directed to continue managing corporate debtor operations and pay outstanding employee salaries in three tranches by May 2025

Ram Kishor Arora Suspended Director of Supertech Ltd. Versus Union Bank of India & Anr.

The NCLAT Principal Bench directed the IRP to continue managing the corporate debtor as a going concern under the 10.06.2022 order. The Tribunal held that ... Requirement to comply with the Tribunal's order dated 10.06.2022 regarding the continuation of construction projects and the management of the Corporate Debtor's operations by IRP - HELD THAT:- Under the order dated 10.06.2022, the projects of the corporate debtor are being run as a going concern under the supervision of the IRP. The construction has been carried out with the co-operation/assistance rendered by the promoters and their staff and employees. The order dated 10.06.2022 being still in operation, all have to act in accordance with the said direction. Any expenses incurred in carrying out the construction, supply of materials and services during the CIRP period payment of CIRP costs has to be paid in priority. It is the case of the parties that earlier the vendors were being paid for their supplies/services which process has halted after 12.12.2024 order - The IRP shall verify/finalise the bills received from vendors/operational creditors as per the process which was being adopted prior to passing of the order dated 12.12.2024. Obligation of the IRP who is discharging duties under Section 17 of the IBC to manage the affairs of the corporate debtor and make payment of salary - HELD THAT:- The submissions of the IRP is that salary for December 2024 has been paid and salary for the month of January 2025 has also been processed and was to be paid in February itself. With regard to outstanding salary for September, October and November, 2024, IRP has stated that the said outstanding salary be paid in three tranches up to 31.05.2025. IRP being the authority to run the corporate debtor as a going concern has to take all steps for meeting necessary expenses including salary. By recording the statement of IRP that outstanding salary for September, October and November 2024 shall be paid by 31.05.2025 in three tranches, we dispose of the application. All outstanding salary shall be paid by 31.05.2025. The employees and officers of the corporate debtor shall render all necessary assistance to the IRP with respect to preparation of salary, bills, invoices etc. Non-cooperation or obstruction from the vendors/ operational creditors as well as the promoters of the corporate debtor in inspection of projects/ taking possession of the projects for carrying out the order dated 12.12.2024 - HELD THAT:- It is already noticed that the operation of the order passed by this Tribunal dated 12.12.2024 has been stayed by the Hon’ble Supreme Court vide its order dated 25.02.2025. As on date, there is no question of taking steps in compliance of the order dated 12.12.2024. The reliefs which are claimed in the application is principally with respect to compliance of the order dated 12.12.2024. We, thus, are of the view that as on date, no order needs to be passed in IA No.1082 of 2025. Consideration of IA No.1082 of 2025 is deferred with liberty to the IRP making a request for fixation of the date in IA. Conclusion - The IRP is directed to comply with the order dated 10.06.2022, manage payments to employees and vendors as per the outlined timelines, and ensure the verification of claims using the pre-12.12.2024 process. Application disposed off. 1. ISSUES PRESENTED and CONSIDEREDThe Tribunal considered several core legal issues, including:Whether the Interim Resolution Professional (IRP) should comply with the Tribunal's order dated 10.06.2022 regarding the continuation of construction projects and the management of the Corporate Debtor's operations.The obligations of the IRP concerning the payment of outstanding dues to employees and operational creditors, including vendors.The procedural and substantive implications of the Supreme Court's stay on the Tribunal's order dated 12.12.2024.The appropriate process for verifying and settling claims of operational creditors and vendors during the Corporate Insolvency Resolution Process (CIRP).Whether the IRP and other stakeholders should continue to manage the Corporate Debtor's projects under the previously established framework until further orders from higher courts.2. ISSUE-WISE DETAILED ANALYSISCompliance with Order Dated 10.06.2022Legal Framework and Precedents: The Tribunal's order dated 10.06.2022 provided a framework for the continuation of construction projects under the supervision of the IRP, with specific mechanisms for financial management and project oversight. The Supreme Court's interim order dated 21.02.2025 stayed the Tribunal's subsequent order dated 12.12.2024, thereby reinstating the earlier framework.Court's Interpretation and Reasoning: The Tribunal emphasized that the IRP must continue to operate under the directives of the order dated 10.06.2022, as the Supreme Court's stay effectively reinstated this order's provisions.Application of Law to Facts: The IRP was directed to manage the Corporate Debtor's projects as a going concern, ensuring compliance with the financial and operational guidelines set forth in the earlier order.Conclusions: The Tribunal concluded that the IRP must adhere to the order dated 10.06.2022 until further instructions from the Supreme Court.Payment of Outstanding Dues to Employees and VendorsLegal Framework and Precedents: Under the Insolvency and Bankruptcy Code (IBC), the IRP is responsible for managing the Corporate Debtor's operations, including the payment of CIRP costs and employee salaries.Court's Interpretation and Reasoning: The Tribunal acknowledged the IRP's obligation to settle outstanding dues and emphasized the need for a phased payment plan due to the Corporate Debtor's financial constraints.Key Evidence and Findings: The IRP's submissions indicated that some payments had been processed, with plans to clear remaining dues by 31.05.2025.Conclusions: The Tribunal directed the IRP to continue processing and disbursing payments as per the established timelines, ensuring cooperation from employees and vendors.Verification and Settlement of Operational Creditors' ClaimsLegal Framework and Precedents: The IBC mandates the IRP to verify and settle claims of operational creditors during the CIRP, prioritizing post-CIRP costs.Court's Interpretation and Reasoning: The Tribunal clarified that the verification process should follow the pre-12.12.2024 mechanism, ensuring transparency and accuracy in settling claims.Application of Law to Facts: The IRP was instructed to finalize bills and commence payments in a phased manner, with operational creditors required to submit outstanding bills within two weeks.Conclusions: The Tribunal directed the IRP to adhere to the established verification process and ensure timely payments to operational creditors.3. SIGNIFICANT HOLDINGSCore Principles Established: The Tribunal reinforced the principle that the IRP must manage the Corporate Debtor's operations in accordance with existing legal frameworks and court orders, prioritizing the continuity of projects and the settlement of legitimate claims.Final Determinations on Each Issue: The IRP was directed to comply with the order dated 10.06.2022, manage payments to employees and vendors as per the outlined timelines, and ensure the verification of claims using the pre-12.12.2024 process.Verbatim Quotes of Crucial Legal Reasoning: 'The order dated 10.06.2022 passed by this Tribunal still being in operation, all concerned including the IRP has to take steps in accordance with the directions till any further orders are passed by the Hon'ble Supreme Court.'