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2020 (7) TMI 296
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....t the corporate debtor was put under CIRP vide order dated 7th August, 2019 in CP(IB) No. 1684/KB/2018. The representative on behalf of 227 workers has stated that to protect the interest of the workers, it was desired that workers be allowed to take over the corporate debtor and for that purpose they had submitted a proposal which is being adjudicated upon in separate CA. However, without land, no successful resolution of the insolvency of corporate debtor was possible, hence, issue of ownership of land at Jamshedpur was central to such resolution. With this opening words, the Ld. Counsel appearing on behalf of the workers initiated his arguments by stating that such land in fact belonged to the Government of Jharkhand as this land had been given to Tata Steel Ltd. under the Government Grants Act, 1895. The Ld. Counsel submitted copy of the said Act and drew our attention to the fact that as per this Act, provisions of Transfer of Property Act, 1882 were not applicable to the Government grants and also terms and conditions relating to such grants were given an overriding effect to any other law for the time being in force. Thereafter, he contended that only one prayer was made and....
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....petition the applicant had not made it a party. It was further contended that Tata Steel Ltd. should have been made a party as its rights were going to be affected and therefore, without such opportunity of making a party the petition suffered from violation of principles of natural justice. Thereafter, the Ld. Senior Counsel submitted that the issue before this Adjudicating Authority was insolvency resolution or liquidation, hence, this aspect was not at all within its jurisdiction nor this Authority had any statutory power to adjudicate upon this aspect. In this regard, he placed strong reliance on the order of the Hon'ble Supreme Court in the case of Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56/[2020] 157 SCL 445 and drew our attention to para 42 of the said order wherein the Hon'ble Supreme Court had clearly demarcated the boundary lines in respect of role and power of the Adjudicating Authority. On the basis of such observations, it was pleaded that the issue related to the civil rights and were to be dealt by public authorities and, therefore, in the present case, NCLT had no jurisdiction. 5. The Ld. Sr. Counsel further cont....
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....ad also been renewed simultaneously and was also valid upto 2026. The Ld. Sr. Counsel further submitted that in case of increase in lease rent, even for these lands, the lessee i.e. Tata Steel Ltd., was entitled to renew the rent to be received from sub-lessees. He after making out his case on the basis of the above facts, contended that daily order in C.P. No. 701/KB/2017 was given in the background of altogether different facts i.e., in that case, the land was given by an industrial authority and which was not the case here nor the terms and conditions of such lease agreement had been produced, hence such case could not be considered as binding. It was also submitted that issue of jurisdiction of this Authority had been kept open. 6. Before we decide the issue on merits for the sake of giving a finality to the issue so that proceedings under section 9 can be culminated in a timely manner, we consider it pertinent to decide the issue of jurisdiction of this Authority at the first instance. The jurisdiction of this Tribunal is in relation to proceedings of Insolvency Resolution or in case of failure of CIRP, liquidation. This issue is not at all connected therewith as this is a ca....
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....for the Company for the purpose of the construction of works of the Company and other works in connection with the Company's undertaking or business AND WHEREAS the Company now intend to extend the said works and to form or take part in the formation of subsidiary Companies for the promotion and development of industrial undertakings or businesses subsidiary to the undertaking or business of the Company or capable of being conducted so as directly or indirectly to benefit the Company (hereinafter called "other Companies") and the Company have applied to the Lieutenant Governor of Bihar and Orissa in Council (hereinafter called the "Local Government") for the acquisition under the provision of the Land Acquisition Act 1894 (hereinafter referred to as "the said Act") of the additional land described in the Schedule hereunder written and delineated in the map hereunto annexed for works and purposes in connection with the undertaking or business of the Company and the establishment, by the Company or by other Companies formed or hereafter to be formed, of industrial undertakings or business subsidiary to the undertaking or business of the Company, including the construction of resi....
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....r any part or parts thereof shall no longer be required by the company for the works and purposes set forth in the preamble the company shall not be entitled to sell or assign its interest in such part or parts until it shall have first offered the same to the Local Government at a price equal to the amount of compensation awarded under the said Act and paid by the company in respect of the land the subject of the transfer upon the acquisition thereof for the company including the amount awarded in respect thereof under section 23(2) of the said Act and until such offer shall have been declined by the Local Government. When such offer has been made by the company the Local Government may accept it in respect of such part or parts or of any portion or portions of such part or parts of the said land as it may deem fit and decline it as to the remainder. 7. A public right of way shall be recognised by the company over such road or paths as the Local Government may prescribe and no demise which may be made hereafter by the company shall in any way affect such public right of way." 9. As far as the claim of applicant/petitioner that the said land had been given to Tata Steel Ltd. u....
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....ntity so long it fulfills and meets the objectives of the preamble of the agreement. It is also noted that till 1999, corporate debtor has paid rent to Tata Steel Ltd. and Tata Steel Ltd. has also paid rent all along to the State government. Further, having regard to this fact and the Indenture of lease dated 20th August, 2005, there remains no doubt that Tata Steel Ltd. is competent to give it on lease as the Government would have either not renewed the lease or would have taken back the possession, in case there was a violation of any of the terms and conditions of the original agreement or any other subsequent law. 10. It is also noted that there was litigation between the State of Bihar and Tata Steel Ltd. and thereafter the estate of the lessee has vested in the State of Bihar under the Bihar Land Reforms Act, 1950 as amended upto date as mentioned at page 32 of the Indenture of Lease and thereafter in subsequent parts of this Indenture of Lease that by deed of agreement dated 4th August, 1984 executed between the State of Bihar and the lessee which was registered on 9th November, 1984 to execute a deed of lease in respect of lands which are deemed to have been leased out to ....
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....pressing these applications, hence, sought to withdraw the same. Accordingly, we grant permission to applicant/petitioner to withdraw the applications and these are disposed of as not pressed. CA(IB) NO. 1748/KB/2019 15. In this application, the Resolution Professional is seeking directions from this authority for liquidation of the Corporate Debtor as per section 33 of Insolvency and Bankruptcy Code, 2016 ("IBC, 2016") read with relevant regulations made thereunder and appointment of Resolution Professional ("RP") as Liquidator. 16. The facts, in brief, are that the Corporate Debtor was admitted under Corporate Insolvency Resolution Process ("CIRP") on 7th August 2019 and moratorium under section 14 of IBC, 2016 was declared. The applicant was appointed as Interim Resolution Professional ("IRP") whose appointment as RP was confirmed thereafter. The RP published public announcement and visited the registered office as well as other offices/industrial locations at Kolkata, Jamshedpur and Pune respectively. It was observed by RP that statutory records including list of assets were not available. List of immovable properties were also not available. 17. The Ld. Senior Counsel appe....
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....d institutional financial lenders and no vote was polled against such proposal. The Ld. Sr. Counsel further emphasized on the fact that though Pegasus Asset Reconstruction Private Limited had now withdrawn but, even otherwise, in all the four CoC meetings, it was part of the process and never raised any objection which were raised in their application and hence, on the merits also, they had no case. To substantiate these contentions and other factual facts, the Ld. Sr. Counsel drew our attention to the relevant pages of the Paper Book containing details of photographs of Pune and Jamshedpur locations to show the pathetic condition of the plant and machinery as well as efforts made by RP to bring all facts to the notice of CoC in compliance to the provisions of IBC Code in letter and spirit. The Ld. Sr. Counsel in particular drew our attention to the following reasons for liquidation instead of going through the whole process of CIRP. "Member of COC discussed and concluded that the corporate debtor should be liquidated due to the following reasons (I) no business operation since many years (ii) plants & machineries are in bad condition (iii) technology is outdated (iv) last audite....
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....f CoC being in contravention to the scheme and objects of the Code and, therefore, liable to be dismissed. It was also pleaded that liquidation will not result in any amount of relief to the workers or will not maximise the value which is also one of the objects. Thereafter, he raised two questions - first question was, who was in the management and their locus; secondly, none of the members of CoC were actual creditors/lenders. After making these pleas, the Ld. Counsel submitted that the line of arguments was that:- (i) The assignment of debt was illegal, hence, void; (ii) Kamala Mills Ltd. and Fasqua Investment P Ltd could not be made members of CoC and they could not have any voting rights as they were a related party; (iii) Decision of the CoC for liquidation was against the provisions of Code, hence, liable to be quashed; (iv) Who was in the management and control and how the rental income from operations at Pune Plant was consumed. 23. As regards assignment, the Ld. Counsel submitted that as per section 5(7) of IBC, 2016, a financial creditor included a person to whom such debt had been legally assigned or transferred to. He emphasized the word of 'legally' a....
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....e of Khardah Co. Ltd. v. Raymon & Co. (India)(P.) Ltd. [1963] 3 SCR 183 and drew our attention to the observations of the Hon'ble Supreme Court in para 7. 24. It was also argued that R R Kabel Ltd. was one of the competitors and in its interest this company should not be revived and all efforts were made since beginning in last 20 years in that direction. It was also argued that the only aim was to usurp the land and develop the same as real estate. The Ld. Counsel in support of this plea relied on the decision of the Hon'ble Supreme Court in the case of S.R.F. Ltd. v. Garware Plastics & Polyesters Ltd. [1995] 3 SCC 465. He drew our attention to the observation of the Hon'ble Supreme Court in para 15 of the said order. He also drew our attention to acquaint us with the history of proceedings before BIFR, AIFR and Hon'ble Delhi High Court in regard to the revival efforts and chequered history of litigation to show that all the parties involved were working against the interest of the workers and were not really keen to get the company revived. He also referred to the claims/offers made by Tata Steel Ltd. and other bidders in those proceedings and based upon that, he....
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....company afresh and proposal of the workers may be considered. 26. In the rejoinder, Ld. Sr. Counsel contended that there were 3 categories of petitioners, (I) financial creditor, (2) workmen and employees, and (3) operational creditor. It was contended that financial creditor had already withdrawn from the proceedings by withdrawing its petition; hence, no relevance anymore. The other categories of petitioners could be classified as workers and employees. Two grounds were raised by them viz., the liquidation proceeding was not valid and RP should be replaced. As far as workers and employees were concerned, they had no locus because they were at best operational creditor with no voting rights. Further, even on the ground of legal identity and legality, they had no right to file these petitions and these petitions were liable to be dismissed at the very outset because, as per the provisions of Power of Attorney Act 1882, no written instrument of power of attorney of so called 200-220 workmen existed. 27. In this regard, the petitioners placed reliance on certain decisions to support their claim and it was also claimed that petition under section 9 had also been accepted. It was cla....
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....e Court, Khardoh Company Ltd. . . . . .(supra), and contended that this observation in fact supported his claim that rights under a contract could be assigned. It was further contended that the officer and officer in default as contained in section 2(59) and 2(60) of the Companies Act 2013 had no relevance. It was also contended that the decision of the Hon'ble Supreme Court in S.R.F. case (supra) was only a finding of facts and no question of law was decided, hence, not of any hold to the cause of the petitioner. It was also contended that in that case there was attempt by a competitor not to allow company revival whereas in the present case the company was not in operation for last 20 years, no records were available, plants were practically in scrap condition. Hence, on the basis of facts, both these cases are altogether different and for this reason also, the findings therein could not be of any use. 30. As regards the decision of the CoC for going for liquidation, it was contended that the commercial wisdom of CoC was supreme as held by the Hon'ble Supreme Court in the case of K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com 139/152 SCL 312 and reiterated b....
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....party as Mr. R.G. Govani had substantial shareholdings therein and was a director also in these companies. Simultaneously, he was a director of corporate debtor as well. It is for this reason they could not be part of CoC. It was further contended that Mr. Govani resigned from such position after commencement of the CIRP and findings given by the Tribunal in its order dated 19-11-2019, though he could have resigned earlier if he considered himself not to be a director. In this regard he referred to provisions of section 5(24) of IBC, 2016 and various clauses thereof. He also placed reliance on the decision of the Hon'ble Supreme Court in the case of Arcelormittal India (P.) Ltd. v. Satish Kumar Gupta [2018] 98 taxmann.com 99/150 SCL 354 and referred to paras 48 to 51 of the said order. The Ld. Counsel also challenged the validity of assignment of debt by original financial creditors in favour of Kamala Mills Ltd. because Kamala Mills Ltd. was neither a financial institution nor a reconstruction company, hence, not eligible. In this regard, he placed reliance on the provisions of section 5 of SARFAESI Act, 2002. Thus, based upon these submissions, the Ld. Counsel submitted that ....
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....d. Counsel appearing on behalf of the workmen at Jamshedpur also supported the contentions raised on behalf of the workers of Kolkata office and further claimed that in the 4th CoC meeting, RP stated that Information Memorandum shall be prepared but RP took a U-turn in 5th CoC meeting. 34. The Ld. Counsel for operational creditor distanced himself from the pleadings of Ld. Counsel appearing on behalf of workmen at Jamshedpur, regarding vacation of office by additional directors in terms of provisions of section 260 of the Companies Act 1956. 35. The Ld. Senior Counsel for CoC/RP again initiated his arguments by stating that there was no locus of the aforesaid parties to file these petitions, hence, such petitions were not maintainable at all. As regards the aspect of Kamala Mills Ltd. being a related party, the Ld. Sr. Counsel submitted that by virtue of order dated 19-11-2019, it had been established that Mr. R.G. Govani was not a director from very beginning. Further, even if it is assumed that he was a director, then, by the pleadings made by Mr. Srivastava himself, he deemed to have vacated the office with effect from 30th September 1999 and therefore, he was grateful to Mr S....
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.... reference should have been made within 180 days from the date of commencement of IBC, 2016 which had not been done, hence, for this reason also the issue of validity of assignment stood closed. The Ld. Sr. Counsel also reiterated his submissions as regards the status of Mr. R.G. Govani as director of corporate debtor and submitted that this issue had already been closed by the order of this Tribunal dated 19-11-2019. He further supported the contentions made by Ld. Sr. Counsel for CoC/RP in this regard. 38. We have considered the submissions made by all the parties and have also perused the material on record. 39. From the perusal of reliefs sought in various applications, except CA(IB) No. ll71/KB/2019, the substantive question emerges is whether liquidation proposal approved by the Committee of Creditors ("CoC") is valid in law ? This question involves various aspects which are being dealt with hereunder. 40. First, we shall deal with the aspect whether efforts should be made for insolvency resolution at the first instance. In this regard, it has been emphasized that as per preamble to the Code, reorganization and insolvency resolution is the first priority. In our considered....
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....the corporate debtor and to take all such actions as are necessary in this regard. Subsequently, Resolution Professional has to carry out the same obligations as per the provisions of section 23(2) of the IBC 2016 read with section 25(1) of IBC, 2016 which provides that it shall be the duty of RP to preserve and protect the assets of the corporate debtor including the continued business operations of corporate debtor. 42. From the above discussion, the crucial aspect which is noticed is the term "going concern". Admittedly, it has not been defined in the Code though used at many places, hence, to find out the meaning of 'going concern', we have to look into the dictionary, accounting literature and judicial decisions. 43. Firstly, we shall look into the legal meaning. As per Black's Law dictionary, "going concern means a commercial enterprise actively engaging in business with the expectation of indefinite continuance." From the perusal of the above definition, a going concern must be actively engaged in business and there must be expectation of indefinite continuance. 44. For accounting purposes, this is a fundamental assumption i.e., financial statements are prepar....
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....o operate independently a business activity which may be whole or a part of the business of the corporate debtor without values being assigned to the individual asset or resource." 47. Authority for Advance Ruling in Karnataka Goods and Service Tax, in a case involving the issue whether sale of business came within the scope of supply of service or it was exempt from GST being a case of transfer of a going concern as a whole or an independent part thereof, observed as under: "A going concern is a concept of accounting and applies to the business of the company as a whole. Transfer of a going concern means transfer of a running business which is capable of being carried on by the purchaser as an independent business. Such transfer of business as a whole will comprise comprehensive transfer of immovable property, goods and transfer of unexecuted orders, employees, goodwill etc." From the perusal of the above, it is noted that going concern concept applies to the business of the company as a whole. The remaining observations are being made with reference to the taxability under GST on account of transfer, hence, not of much significance for us. Having said so, for our purpose, wh....
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....lso manufactured. The company was profitable till 1991. Subsequently, it started incurring losses and during 1993-1996, there was a virtual stalemate in the company's operations. Jamshedpur plant was closed down completely for 34 months. The lenders of the company started looking for another promoter and entered into an MoU with Leader Universal Holdings Berhad - a Malaysia based company, in December 1996, who acquired 51.16% equity shares by forming a special purpose vehicle in Mauritius. In spite of the above arrangements, corporate debtor incurred further losses and due to massive losses suffered in financial year 1999, its worth was completed eroded. Accordingly, it became a sick company and the main reasons were lack of management efficiency, non-investments in new productive assets in line with upcoming cable product categories, lower productivity, very high leverage and poor working capital management, high power and fuel, employee and interest costs and excessive manpower. Thereafter, it was referred to BIFR under section 15(1) of SICA in October 1999. On 4th April 2000, BIFR declared the corporate debtor a sick company and SBI was appointed as Operating Agency (OA). BI....
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....visions of section 20 of SICA, the winding up order is passed when an opinion is formed that sick industrial company was not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and company was not likely to be viable in future although subsequently proposals were asked, but the preliminary opinion formed by BIFR was of winding up. Hence, as early as in 2004, writing on the walls regarding fate of corporate debtor became evident and in spite of subsequent proposals, the situation has remained so even as on date. The other situation as has been prevalent is embroiled and protracted litigation without any tangible results for last 20 years. 51. Thus, considering overall facts of the case and applicable legal position, it is concluded that the corporate debtor is not a going concern, particularly when vast technological changes have taken place over a period of last 25 years and the plant and technology in possession of the corporate debtor are obsolete, out-dated and beyond repair/renovations due to depletion thereof. To put it in simple words, corporate debtor is not a going concern but already a gone concer....
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....s and circumstances of the case as well as intent of the Code and Regulations as amended recently, the status of the corporate debtor need not be made as a going concern as there is no legal necessity to do so mandatorily. However, as mentioned earlier, if the lenders wish to do so voluntarily, they can do so. 55. The other question is as regards the role and power of CoC. As far as role and power of CoC are concerned, the basic structure of the IBC, 2016 is based on the theme of creditors in control. Therefore, the CoC has been empowered to exercise its jurisdiction in espect of all the key matters during CIRP without any interference as far as its commercial wisdom is concerned. The only restriction is that any activity/decision of CoC should not be in contravention or violation of any law for the time being in force. The role of Adjudicating Authority to disturb the decisions of CoC is very limited in scope and its obligation is further circumscribed by explicit provisions of IBC, 2016 giving extensive jurisdiction to CoC in respect of all crucial decisions. This position has been confirmed in an array of decisions of Hon'ble Supreme Court and Hon'ble NCLAT. In the back....
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....irstly, CIRP should be tried and even in the course of liquidation an entity could be sold as going concern. In this regard, it is noteworthy that in such cases corporate debtor was a going concern at the time of initiation of CIRP which is not the case here. Further, other circumstances of those cases also suggested for such a view. As one of the stated objectives of the code is that essence of the code is speed which was the main lacunae in earlier insolvency resolution regimes. It was also observed that delay in decision for liquidation eroded valuation of corporate debtor also. Accordingly, explanation to section 33(2) was added w.e.f. 25-7-2019, simultaneously with the incorporation of new regulations focusing on sale of corporate debtor as a going concern during liquidation. The said clause reads as under: 33(2) where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors approved by not less than sixty-six percent of the voting share to liquidate the corporate debtor, the Adjudicating Authority shall pass a liqu....
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....concern during resolution process, then, limited judicial review of the decision of the CoC could be done by the Adjudicating authority. In our most humble opinion, this decision does not help the cause of the applicant for the simple reason that in the present case corporate debtor is not a going concern, hence, how it can be kept as a going concern. Secondly, in case of liquidation, the workmen and employees generally gain more as compared to resolution in view of the provisions of section 53 of IBC 2016, which also refers to section 326 of Companies Act 2013 for determining "workmen's dues". As far as taking care of interest of workmen/employees being operational creditors, no doubt, liquidator is supposed to dispose of the assets as a package, in terms of provisions of Regulation 32 and 32A of IBBI (Liquidation Process) Regulations 2016 read with Regulation 39C of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, keeping in mind such objective along with maximisation of value for all stakeholders. Having said so, we are of the view that commercial wisdom of CoC cannot be challenged as it is basic instinct of the Code and this has been held so in t....
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....present case, it cannot be disputed that all the information as required in Information Memorandum cannot be given. It has also been observed in the earlier part of the order that corporate debtor is not a going concern and cannot be continued as such, unless some material positive development happens. In these circumstances, information memorandum, if prepared, in our view, would not have served any purpose. Further, in the first four CoC meetings, it has been submitted that efforts were made to prepare Information Memorandum. However, once a decision has been taken by CoC for liquidation, then, preparation of information memorandum loses all its significance as liquidator has to prepare asset memorandum. 61. An allegation has been made that there was no requirement for taking permission of CoC for preparation of Information Memorandum. We can understand that it can be so in general, but once a resolution professional, who has been appointed by CoC and who is less independent as compared to liquidator in the scheme of the Code, if such resolution professional, in the background of this case, seeks permission for preparation of information memorandum from CoC where regulation 36(3....
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....a judicial mechanism evolved during winding up over the years to protect the interest of workers whose efforts cannot be ignored in making of an organisation over a long period. An attempt was made by introducing section 457 in Companies Act, 1956 by an amendment thereto and by incorporating section 282(2) in the Companies Act 2013. However, both attempts did not materialise. However, Judicial pronouncements have been made under IBC as well to see that corporate debtor remains a going concern or it can be sold as a going concern so that workers and employees can be taken over by the new promoter. Still, there is no definition of liquidation under IBC 2016 nor any substantive provision has been brought in IBC 2016, except through an indirect implication by virtue of section 35(l)(f) of the IBC, 2016, proposal of compromise or arrangement under section 230 of the Companies Act 2013 through the liquidator can be made although Regulation 39C has been brought in CIRP Regulations 2016 and Regulation 2B, Regulation 32(e) and 32(f) read with Regulation 32A of (Liquidation Process) Regulations, 2016 have been brought whereby scheme of arrangement can be devised or liquidator can sell the co....
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....sable assets except land and building, such business entities have been sold to new promoter who took the risk of infusing funds and took care of the workers' interests though with certain conditions and compromises being made by all the parties to enable such effort. Having said so, in the present case, there is no technological advantage or tangible assets exist except one land at Pune which can be undisputably used for industrial activity. Assets other than this and leasehold land at Jamshedpur for which lease deed has already expired are non-business assets which may fetch surplus capital. However, issue in the present case does not appear to be so simple nor there can be any straight jacketed formula in a case like this where the history is of a chequered litigation and indifferent approach of all concerned to this effect and now a huge competition exists. There are competing challenges. In case of all assets including surplus assets, if any, issue of mortgage and encumbrance remain there. There could be other liabilities, obligations, dues against the corporate debtor which need to be settled out from the liquidation proceeds in accordance with the provisions of the IBC, ....
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.... under Eighth Schedule by any of the aggrieved parties within 180 days from the date of commencement of IBC, 2016 if any proceeding was pending though no material has been brought to record. Even if it is assumed that the period of 180 days had expired before passing of this order by the Hon'ble Supreme Court and which cannot be the intent of the Hon'ble Supreme Court to keep the aggrieved parties remediless, hence, even considering the limitation of 180 days from the date of the order of the Hon'ble Supreme Court i.e. 11-9-2017, no petition has been filed under IBC, 2016 within a period of 180 days therefrom. In this regard, the fact which is noticeable even in petition filed under section 9 on 28-11-2018 and no aggrieved party filed any interlocutory application to raise this issue as it would have an impact on the composition of CoC if the corporate debtor was admitted into CIRP. Thus, prima facie, this issue has been closed by the parties by their own conduct and cannot be raised now. 68. Having said so, even on merits, the aggrieved parties have relied on the provisions of section 5 of SARFAESI Act, 2002 as to the eligibility of M/s. Kamala Mills Ltd. and Factorin....
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....tion is made in IBC 2016 and secondly, if this view is accepted, then, it would result into a situation where an assignee or transferee could file the petition under section 7 or section 9, as the case may be, but could not become a part of CoC. Further, as per section 21(2), CoC shall comprise of all FCs. FC includes an assignee or a transferee as per section 5(7) of the IBC 2016, hence, for this reason also, this contention is rejected. The reliance placed on the judicial decision by the applicant workers/employees is also misplaced because such decision does not help the cause of the applicants for the reason that rights of original lenders have been legally assigned/transferred as per the applicable laws thereof. It is further to be noted that in view of the definition of term "claim" as given in section 3(6) read with section 238 of IBC, such pleas do not serve any purpose because on equitable ground such claim or even being not legal then also such claim can be considered. However, the workers/employees will be subjected to the provisions of the code i.e. if they get distribution of sale proceeds as per section 53 of Code, they cannot claim the same amount again or any right ....
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....r, hence, rejected. As far as the proposal of the workers to revive the unit is concerned, it is noted that it is not a concrete proposal in any manner, hence, not worthwhile considering at this stage. In this regard, we further observe that in the past no such proposal has ever been made and the workers have supported one or the other bidders during proceedings with BIFR/AAIFR, which have also yielded no results as far as revival of the corporate debtor is concerned. We further observe that the proposal made on behalf of the workers conceived to arrange the funds by selling surplus assets which is exactly their allegation against the lenders that they wish to usurp the land and properties and sell those assets, hence, from this angle also, the proposal of the workers cannot be considered at this stage. However, there is no bar against them to submit a proposal through Liquidator under section 230 of the Companies Act, 2013 or to the Liquidator in terms of provisions of IBC, 2016 and relevant regulations made therein. 74. Considering overall facts and circumstances of the case and in view of foregoing discussion, we approve the decision of CoC and order that corporate debtor be li....