TaxTMI 
TaxTMI 
2019 (3) TMI 308
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....as a party in the Industrial Court; c. That pending the hearing and final disposal of the Application, the Hon'ble Tribunal may be pleased to allow the Interim Resolution Professional/ Resolution Professional to be impleaded as a party in the Industrial Court; Or in the alternative: d. That this Hon'ble Tribunal be pleased to pass an Order allowing the workmen of the Corporate Debtor to re-submit their claims to the Interim Resolution Professions/ Resolution Professional inorder to claim their accruing salaries in the event that any resolution plan that envisages running of the factories of the Corporate Debtor, by any person whatsoever is approved; e. That this Hon'ble Tribunal be pleased to pass an Order directing that the workmen who were employed by the Corporate Debtor to be taken back on the job, in the event that any resolution plan that envisages running of the factories of the Corporate Debtor by any person whatsoever, is approved; f. For costs of this Application." 2) At the outset it is worth to mention that this Application is moved by invoking Rule 11 of NCLT Rules 2016. In the past an Application was moved U/s 7 of Insolvency Code by the 'Financial Credi....
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.... to be approved only on recording a "satisfaction" by Adjudicating Authority of NCLT. According to the arguments whenever a "satisfaction" is to be recorded by a Court, it is always a judicial Order passed after due consideration of all the facts and circumstances as well as after providing due opportunity of hearing to all the parties going to be affected by the said judicial Order. Hence it is pleaded that before recording 'satisfaction' it is judicially required to give an opportunity to this Applicant to explain the quantum of claim pending since long for payment by the Debtor Company. According to the Learned Counsel it is a question of bread and butter of the Labourers and Workmen. B) Next legal point raised by the Learned Counsel is that the Resolution Plan so approved by the Adjudicating Authority is "Binding" on the (i)Corporate Debtor, (ii)its employees, (iii)members, (iv)creditors, (v) guarantors, and (vi) other stakeholders involved in the Resolution Plan. If an Order of a Judicial Body is binding upon a person, then the said person is entitled for hearing so that he can explain before the Court his point of view. Without hearing if an Order is passed, such an Order s....
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..... This Miscellaneous Application is bad in law being filed under Rule 11 which is not applicable on Insolvency Proceedings. Certain legal points raised by the Learned Representative are summarized as under:- i) If this Prayer is allowed, the consequence shall be that the CIRP proceedings shall get paralyzed. There shall be an unending litigation if all the stakeholders are allowed to intervene in the process of Insolvency. It may lead to frivolous as well as motivated litigation. ii) Next it is pleaded that a Resolution Plan is a document containing provisions to satisfy a large extent of claim of respective stakeholders. At this juncture it is clarified that in this Resolution Plan, as well, due care has been taken to make provision about the payment of outstanding wages to Workmen. He has clarified that 57 claims including Workmen claims have been received for a sum of Rs. 5,56,09,216/- out of which a provision of payment of Rs. One Crore is already made in the Resolution Plan. According to his argument, in a situation when the resources of Fund are limited then all the stakeholders are expected to share among themselves the available Funds. The Resolution Applicant has submi....
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....articular the incorporation of National Company Law Tribunal. Herein below are the pointwise reasons to Adjudicate the issues in hand. 9.1) It is a known position that a Tribunal is a Quasi-Judicial Body, however, vested with all powers to Adjudicate a dispute which an ordinary Court would do. Tribunals are set up with the motive to be less formal, less expensive at a faster way to resolve the dispute instead of using lengthy traditional Court system. Moreover, NCLT is created to avoid multiplicity of litigation as also to reduce the delay in dispensation of justice. Quick justice delivery system is to be adopted under NCLT regime. So the Tribunal is an Institution with Constitutional Authority to judge, adjudicate upon or determine claim or dispute. For rendering speedy Judgments, a procedure of 'summary trial' is thus required to be adopted. In summary trial completion of hearing and thereupon immediate judgement is required for speedy disposal of cases. Judicial process is to be expedited. Evidences are to be placed for consideration and allowed to be supported by affidavits in place of lengthy trial of examination of witnesses or cross examination of evidences. Proceedings bef....
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....s after proper application of mind. The pros and cons of the scheme is required to be studied before recording subjective satisfaction. If the CoC has submitted the scheme of Resolution after visualising the advantage and disadvantage then such proposal can be termed as just and equitable fit for according satisfaction. An 'objective satisfaction' revolves around the object of enactment of the Code as enshrined in the Preamble of the I & B Code i.e. to revive the financially stressed corporate body. And the 'subjective satisfaction' depends upon logical analysis of the Financial Data supplied so as to match with the business model of the Corporate Debtor. A methodical scrutiny of Financial Statement is expected before concurring with approval of the CoC. Per contra, absence of recording of subjective satisfaction may lead to situation that, being sanctioned without judicial analysis, thus may not be sustainable in the eyes of law. There are no two views, and must not be, that this I & B Code provides greater accountability both on the Insolvency Professional, as also on CoC, mainly comprise of lender Banks. Their approval of a Resolution Plan ought to be judged with due diligence. ....
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....ion. If at all the grievance can be said to be in the minds of Workmen that appears to be in respect of the quantum of the claim and not the claim itself. Therefore, fixation of the quantum depends upon several other factors and one of them most importantly is the availability of total Funds to be invested by a Resolution Applicant. To achieve this purpose and to strike a right balance among all the claimants including financial creditor, a calculation sheet is submitted according to which the percentage of settlement is about 69% of the recovery value. I am in the process of examination the resolution plan, now under consideration, to verify the overall picture. Thereupon came to know that the workmen/employees have filed claim approximately Rs. 5.56 Crore, however, as against that, the Resolution Applicant had proposed to make a payment of Rs. 1 Crore or the liquidation value, whichever is higher. It has also been clarified that payments to workmen/employees/labourers shall be made within 30 days on approval of the plan and taking over of the management. To achieve this goal, the proposal of Rs. 70 Crores upfront payment has been made. Therefore, considering the induction of Fund....