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2021 (4) TMI 1370
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....plication is barred by limitation or not apart from other issues. On this aspect, the Operational Creditor relied on some orders of the Hon'ble NCLAT whereas Learned Counsel for the Corporate Debtor relied on order of this Authority in case of Mazda Agencies vs. Hemant Plastics & Chemicals Ltd. It was also brought to our notice that the order of this Authority in the case of Mazda Agencies vs. Hemant Plastics & Chemicals Ltd. had been challenged before the Hon'ble NCLAT, hence, matter be kept pending so that the issue could be decided thereafter, having regard to the judicial view which may be expressed by the Hon'ble NCLAT in the said case. Accordingly, this matter was postponed from time to time. In the meantime, the Operational Creditor filed an Appeal before Hon'ble NCLAT in Company Appeal (AT) (Insolvency) No. 93 of 2021 and Hon'ble NCLAT vide order dated 16.02.2021 directed this Authority to dispose of the matter as expeditiously as possible and preferably within four weeks therefrom. Accordingly, this matter was heard and reserved for order on 17.03.2021. The written submissions have been filed by the Corporate Debtor on 22.03.2021 and by the Operational ....
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....s. (Copy of the order dated 07.01.2005 passed by the Hon'ble AAIFR along with the sanctioned scheme is annexed at "Annexure-AA/5 - Pg. 43-80" of the Additional Affidavit). 5. That consistent orders of Hon'ble BIFR, observed that the JKSL and APPL (corporate debtor herein) failed to comply with the terms and conditions of TLSA agreements dated 09.10.2002 and 22.10.2002 and the sanctioned Rehabilitation Scheme. (Copy of the orders passed by Hon'ble BIFR are annexed at "Annexure-AA/6 - Pg. 81-100" of the Additional Affidavit). 6. That in an order dated 06.12.2010 passed by the Hon'ble BIFR, the Bench in view of the decision dated 24.09.2010 of the Hon'ble Supreme Court of India, directing the rehabilitation process to continue, the Bench directed the APPL and JKSL to explain how the scheme could be considered as implemented when APPL failed to restart any of the seven plants and has failed to implement any other clauses of the scheme, especially those relating to the payment of Workers' dues. (Copy of the order dated 06.12.2010 passed by Hon'ble BIFR is annexed at "Annexure-AA/9 - Pg. 131-133" and copy of the order dated 02.11.2011 passed ....
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....4) Order dated 24.09.2010 by Hon'ble Supreme Court - Rehabilitation process to continue [Reference Page 133 of Additional Affidavit, Vol.1, First para.] (c.5) Order dated 18.11.2016 by Hon'ble Supreme Court - It is open to the BIFR to review the implementation of the Sanctioned Scheme [Reference Page 383-384 of Additional Affidavit Vol.2, Para. 12 bottom line] (d) Admission of Debt by part payment during/pendency of proceedings/Cheques showing the part payment made to one of the petitioner/worker during the pendency of the case. [Annexure-A, Page 13-17 of IA No. 115 of 2020 in CP (IB) 469 of 2018] 2. Claim of Operational Creditors is within the period of Limitation as per IB Code. 2.1 That the following table represent that the Application under section 9 was filed within the limitation period as per Article 137 of the Limitation Act. SR NO. EVENTS DATES A Date of BIFR order registering Reference with BIFR 02.04.1998 (2nd April 1998) B Date of AAIFR Order sanctioning the Rehabilitation Scheme 07.01.2005 (7th January, 2005) C Date of abatement of SICA, 1985 01.12.2016 (1st December, 2016) D Period ....
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....6. Therefore, for purposes of limitation such period has to be excluded." It is humbly submitted that Workers were part of the AAIFR sanctioned Rehabilitation Scheme and their right to initiate proceedings remained suspended by virtue of section 22(1) read with section 22(5) of SICA. 1985. Further the Applicants herein are covered in the list of Worker's dues and also did not filed any suit with any Civil Court for recovery of their money, Hence Applicants are covered for the exclusion of period of limitation u/s. 22(5) of SICA until December 1, 2016 as upheld in facts of the case from NCLAT Appeal Re; Mazda Agencies vs. Hemant Plastics & Chemicals Ltd. Co. Appeal. (AT) No. 763/2020. 3. NO PRE-EXISTING DISPUTES. 3.1. That the corporate debtor, in their reply has showcased numerous list of cases filed before various forums and hence relied on the rulings of the Hon'ble Supreme Court of India in "Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd." in their reply to the main petition. The Appellate Tribunal in "Kirusa Software (P.) Ltd. v. Mobilox Innovations (P.) Ltd." [2017] 82 taxmann.com 191/142 SCL 310 (NCL-AT) notices various nature....
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....ts to bring on record all facts related to the matter and the Respondent/APPL was given sufficient opportunity to reply to the additional affidavit/amendment to Form 5 Application. It is not disputed that the Debt and Default arise out of BIFR/AAIFR sanctioned Rehabilitation Plan, and debt has a statutory genesis and character. The Corporate Debtor has failed to provide sufficient proof of payment of debt on the contrary repeated orders of BIFR since 2005 onwards till 2013 indicate repeated failure of APPL to honour the debt and other terms of the sanctioned Rehabilitation Plan. There is No real dispute and Debt being statutory in character, this Application under section 9 of the IB Code is bound to be admitted by this Hon'ble AA. 3.4. Further in the light of relevant paras of the above cited judgment, it is submitted that the claim by the operational creditors herein is genuine, bona fide and undisputed as it was held in every orders of the Hon'ble BIFR/AAIFR that the payment to the workers is due and payable by the APPL. The same had also been upheld in the various orders of Hon'ble Supreme Court which has been formulated as a part of this petition. The rele....
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.... Not approached Civil Court in recovery suits, in such circumstances it can be said that the legal right of remedy of the Applicants against the Respondent was suspended as per section 22(1) of the SICA. The Applicants meets the tests laid by NCLAT and their names are included in the list of claimants as per AAIFR sanctioned Scheme. ISSUE 2 - EXISTENSE OF DISPUTE RESPONSE OF THE APPLICANT a) No dispute between the Applicants and Respondent as parties on the grounds of quality of service at any Forum. b) Any dispute shown after service of Demand Notice not to be considered. Dispute has to be pre-existing between the parties. None of the cited cases at Hon'ble High Court or elsewhere by the Respondents are between 125 employees and Corporate Debtor. ISSUE 3 - CHANGES TO APPLICATION (FORM 5) RESPONSE OF THE APPLICANT a) Amendment was allowed as per order dated 14.10.2019 of this Hon'ble Adjudicating Authority to bring all material facts for adjudicating of the case. b) Respondent was given adequate opportunity to file reply to the amendment. c) This Court allowed the amendment subsequently and said pleadings are complete....
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....s always been universally understood that a party can always act by his duly authorised representative. If a power-of-attorney holder can enter into an agreement or compromise on behalf of his principal, so can counsel, possessed of the requisite authorisation by vakalatnama, act on behalf of his client. Not to recognise such capacity is not only to cause much inconvenience and loss to the parties personally, but also to delay the progress of proceedings in court. Jk Jute Mill Mazdoor Morcha vs. Juggilal Kamlapat Jute Mills Company Ltd. SC Civil Appeal No. 20978/2017 Ratio: Workers are allowed to file Application u/s. 9 either singularly or Jointly. Workers man file application through Union as well. Thus filing through Union is not a mandatory requirement. We must never forget that procedure is the handmaid of justice, and is meant to serve justice. Supreme Court 10 and 11 Suresh Narayan Singh v. Tayo Rolls Ltd. C.A. (AT) 112/2018 Date: 26-09-2018 Ratio - Workmen of a company are Operational Creditors under Section 9. Application by Operational Creditors who are employees/workmen can be filed Jointly signed by anyone of them. NCLAT 4 & 6....
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....solution Process under Section 9 of the IBC. Secondly, addressing to the Second legal issue raised herein; in "Ashapuram Minechem Ltd., In Re" (C.P.(IB) No. 4508/MB/2018), the Hon'ble NCLT, Mumbai Bench has noticed the proximity of intentions of the incorporation of SICA and the IBC, 2016. The discoveries with respect to the proximity of the intentions of the incorporation of the Code are observed by relying and contemplating the orders of the Hon'ble Supreme Court of India passed in "M/s. Spartek Ceramics India Ltd. Union of India" (Civil Appeal No. 7291-7292 of 2018). [Para 24]. Important to note here, that, the order of the case 'Hyderabad Abrasives & Minerals vs. Andhra Cements Ltd. (2003 42 SCL 748 AP)' which the Tribunal relied upon mentions that a scheme approved by BIFR when under implementation can be modified by BIFR in accordance with section 18(3)(b) of SICA and so the implementation is a continuous process and that even if the time-period allotted under the scheme sanctioned by BIFR for settlement of dues has expired the protection granted under the scheme to the company does not diminish. Hence the present proceedings u/s. 9 ....
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....enough that a dispute exists between the parties. Similar view has been taken by the Hon'ble Supreme Court in the matter of DT Deutsche Forfait AG and Anr. vs. Uttam Galva Steels Ltd. wherein the Civil Appeal was dismissed on the ground that the dispute which has been raised was a preexisting dispute. It is submitted that in the instant case, there are pending and pre-existing disputes between the parties. There are various disputes with respect to the Tripartite Settlement Agreements ("TLSA") dated 09.10.2002 and 22.10.2002. In light of aforesaid facts, the instant insolvency petition deserves outright dismissal. Time Barred & 'Suit' and 'Application' distinguished 4. It is submitted that the alleged claim is grossly time barred and directly hit by the judgment passed in the matter of Mazda Agencies vs. Hemant Plastics & Chemicals Ltd. wherein Hon'ble NCLAT discussed Gouri Prasad Goenka vs. Punjab National Bank & Anr. (on which present petitioner relied) and submitted that Appellant is not entitled for exclusion of the period which spent during the pendency of proceedings under SICA. In such circumstances, the alleged claim deserves to be ....
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....that the demand notice issued by the Applicant itself is not maintainable as there is no exact amount of debt is mentioned and only vague amount is mentioned, therefore, the amount of debt is not crystallized the demand notice itself is defective and not enforceable and it could be constructed there is no demand whatsoever and the alleged amount of claim cannot be recognized as any kind of operational debt. 7. It is submitted that the applicant under the garb of rectifying Form 5, has produced a fresh Form-5 before the Adjudicating Authority which is not in accordance with the Code and not permitted as per order dated 24.09.2019. Order dated 24.09.2019 of Hon'ble Adjudicating Authority only gave permission to produce relevant documents and to give clarification on question of maintainability. (Copy of order dated 24.09.2019 is attached and annexed as Annexure W-4). Therefore, the present applicant under the garb of rectifying form 5, has produced a fresh Form-5 before the Adjudicating Authority which is against the provision of the Code and it is an attempt to change the entire nature of proceedings. Further it is submitted that through fresh FORM-5, employee Nos. 43, ....
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....hed and marked as Annexure W-5) case it is settled principal that a trade union which is formed for the purpose of regulating the relation between workman and their employer is maintainable petition as an operational creditor on behalf of its members. In the present case, the petition is filed by one individual who claims to be representing more than 125 employees. Such a petition is not maintainable. Considering the above referred judgment of the Hon'ble Supreme Court, it is only a registered trade union which can maintain the petition. Further, some unions in which applicants are party have filed cases which are pending before High Court and labour court which are pending adjudication. 5. Our Conclusion (I) We have considered the submissions made by both sides and material on record. In this case, it is noted that the application under Section 9 has been filed. During the course of hearing initially, pleadings and arguments started considering such nature of this application. The arguments mainly centered around as to whether this application filed under Section 9 of Insolvency and Bankruptcy Code, 2016, 2016 was barred by limitation or not. This case is a case as....
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....cial Provisions) Act, 1985 shall be deemed to be an approved resolution plan under sub-section (1) of Section 31 of the Insolvency and Bankruptcy Code, 2016 and the same shall be dealt with in accordance with the provisions of Part II of the said Code. Provided also that in case, the statutory period within which an appeal was allowed under the Sick Industrial Companies (Special Provisions) Act, 1985 against an order of the Board has not expired as on the date of notification of this Act, an appeal against any such deemed approved resolution plan may be preferred by any person before National Company Law Appellate Tribunal within ninety days from the date of publication of this order." 33(3). Initiation of liquidation.- (3) Where the resolution plan approved by the Adjudicating Authority is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii), (iii) of clause (b) sub-section (1). From the perusal of 3rd proviso which was inserte....