TaxTMI 
TaxTMI 
2025 (5) TMI 266
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....uthority (National Company Law, Tribunal, Allahabad Bench, Prayagraj), admitting a Section 9 application C.P. (IB) No.280(ALD)/2018 filed by Devi Prasad Respondent No. 1, herein. 2. There is a chequered history of litigation with respect to corporate debtor (hereinafter referred to as JK Jute Mills Company Ltd.). 3. We need to notice certain background facts leading to filing of Section 9 application by Respondent No. 1 against the corporate debtor: i. JK Jute Mills Company Limited having its registered office at Kanpur, Uttar Pradesh filed Reference No. 149/1994 before the Board of Industrial and Financial Reconstruction (BIFR) under the provisions of Sick Industrial Companies (Special Provisions Act) 1985. Though a scheme was initially sanctioned for reconstruction, BIFR, however, subsequently held the scheme to have failed and directed the company to be wound up. ii. Appeal was filed before the appellate authority for Industrial and Financial Reconstruction, which stayed the wind-up order, however, proceeding before the BIFR continued. During pendency of the proceeding, Sarda group took over the company and took over the management. iii. The Draf....
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....workmen from representing their alleged dues in various forums till the suit is finally decided. Declaration was also sought that document submitted in the Draft Rehabilitation Scheme (DRS) by any parties is null and void. xii. The R-1 Devi Prasad sent a demand notice under Form-III dated 29.05.2018, claiming an outstanding amount of Rs.5,24,132/-. xiii. Section 9 application was filed by respondent on which C.P. IB No.280/ALD/2018 was registered, notices were issued, reply was filed by corporate debtor to which rejoinder was filed. xiv. The Civil Appeal filed by JK Jute Mazdoor Morcha, was against the order of this Tribunal dated 12.09.2017, which was passed in appeal against the order dated 28.04.2017, rejecting Section 9 application by JK Jute Mazdoor Morcha. Hon'ble Supreme Court vide its order judgment dated 30.04.2019 has held that application under Section 9 by a Trade Union is maintainable. It was held that Trade Union can be an operational creditor. The order of this Tribunal dismissing the appeal was set aside and matter was remanded to the NCLAT who was to hear the appeal filed by JK Jute Mazdoor Morcha. xv. In the appeal which was fil....
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....e disposed of in view of admission of Section 9 application filed by Devi Prasad has filed intervention applications in these appeals. Reply has been filed by R-1. Affidavit in a common reply of the appellant have been filed in the intervention application. Resolution Professional (RP) has also filed a reply in the appeal. Affidavit in the rejoinder has been filed by the appellant. 4. We have heard learned sr. counsel, Mr. Abhijeet Sinha appearing for the appellant. Learned Senior counsel, Ms. Malvika Trivedi appearing for R-1. Learned counsel Govind Bhardwaj has appeared for IRP. We have also heard learned counsel appearing for the intervenors. 5. Learned sr. counsel Mr. Abhijit Sinha appearing for the appellant challenging the impugned order dated 19.01.2024, admitting Section 9 application submits that claim made by R-1 is not an operational debt. Counsel for the appellant has relied on the judgment of this Tribunal in the matter of 'Kishore Kamlakar Lonkar' Vs. 'Hindustan Antibiotics Ltd.' in Comp. App. (AT) (Ins.) No.934/2021. It is further submitted that petition filed by R-1 is hit by res judicata. R-1 having already pressed his claim as part of JK Jute Mazdoor Morcha ....
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....ing dispute. Suit No. 500/2017, which has been filed by the corporate debtor seeking declaration against Union of India with the DRS or any other pleading before DRS by the company was only in order to compromise worker due and not an admission of debt. The said suit in no manner disputes the claim of gratuity which has been established by award dated 26.02.2024. It was admitted by the corporate debtor before the adjudicating authority that order dated 26.02.2024 was never challenged. Adjudicating authority has rightly held that suit only concern with DRS and operate on different field. Award by Labour Commissioner dated 26.02.2024 has become final and there are no pre-existing disputes between the parties regarding claim of gratuity amount. It is submitted that operational debt has been acknowledged and admitted by the corporate debtor. Learned counsel for the appellant has referred to the order of Delhi High Court dated 06.12.2017 where Writ Petition was disposed of with the consent of the corporate debtor, granting liberty to the workmen to invoke jurisdiction of NCLAT. The Civil Suit seeking to injunct workers was filed on 12.12.2017 and 15.12.2017, after the order of the Delhi....
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....for winding of the corporate debtor since sanctioned scheme had failed. There being stay by the Appellate Authority for Industrial and Financial Reconstruction, no steps could be taken regarding winding up, but the fact remains that corporate debtor continue to be the Sick Company till the provisions were repealed. The JK Jute Mazdoor Morcha had filed an application under Section 9 by giving a Section 8 notice on 14.03.2017 on behalf of roughly 3000 workers under Section 8 of the IBC for outstanding dues of the workers. The JK Jute Mazdoor Morcha filed Section 9 application which was dismissed by adjudicating authority on 28.04.2017, against which appeal was also dismissed by this Tribunal, and the matter was taken to the Hon'ble Supreme Court, where judgment dated 30.04.2019 was delivered by the Hon'ble Supreme Court in the matter of 'JK Jute Mills Mazdoor Morcha' Vs. 'Juggilal Kamlapat Jute Mills Company Ltd.' reported in (2019) 11 SCC 332. Hon'ble Supreme Court held that Trade Union is also included within the definition of persons under Section 3(23) and union could also be an operational creditor. Hon'ble Supreme Court set aside the order of this Tribunal and remanded the matt....
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....cation under Section 9 could be filed only after the expiry of 10 days of the delivery of demand notice and not before the expiry of 10 days, therefore, the application filed by the Appellant, was premature and not maintainable and has rightly been dismissed by the Adjudicating Authority." 12. Appellate Tribunal, thus dismissed the appeal filed by JK Jute Mazdoor Morcha as premature. No other issue was decided by this Tribunal against which order of Civil Appeal 3163/2023, was also dismissed by the Hon'ble Supreme Court on 17.05.2023. 13. It is also relevant to notice that in the said appeal being Comp. App. (AT) (Ins.) No. 82 of 2017, an affidavit was filed by Devi Prasad on which much reliance has also been placed by the appellant which shall be considered hereinafter. It was after the dismissal of the said appeal and judgment of the Hon'ble Supreme Court that Section 9 application filed by the R-1 came to be admitted on 19.01.2024. Adjudicating authority in the impugned order has framed three issues for consideration in paragraph 13, which are as follows: "13. We have perused the materials submitted on record and heard the Ld. Counsels for both the partie....
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....ebt in respect of the 5[payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;" 17. Payment of gratuity along with interest claimed by the R-1 is on the basis of award dated 26.02.2014, which award had become final and was never questioned by the corporate debtor, which fact has been recorded by the adjudicating authority in the impugned order. In paragraph 22 of the order, following has been observed: "22. It may be noted that the minimum amount of default as has been prescribed under Section 4 of the Code has a purpose and object. The object is that unless there is a minimum amount of default, no person should be permitted to initiate CIRP. The threshold limit for initiating CIRP in this case is in terms of the order dated 26.02.2014 passed by the Asst. Labour Commissioner which is decretal amount of Rs. 70,700 along with interest @8% p.a. till date of filing application before the Asst. Labour Commissioner i.e. 24.01.2013. The total decretal amount is 1,23,725. This decretal amount is adjudicated by the Labour Court as a legally payable claim crystallized and payable in la....
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....d by the company; (c) "workmen's portion", in relation to the security of any secured creditor of a company, means the amount which bears to the value of the security the same proportion as the amount of the workmen's dues bears to the aggregate of the amount of workmen's dues and the amount of the debts due to the secured creditors." 19. All sums due to any workmen from the gratuity fund or any other fund for the welfare of the workmen is maintained by the company is specifically included in workman dues. 20. Learned counsel for the appellant has relied on the judgment of this Tribunal in 'Kishore K. Lonkar' Vs. 'Hindustan Antibiotics Ltd.' reported in 2022 SCC OnLine SC NCLAT 287 to submit that this Tribunal held that welfare dues do not constitute and cannot be treated to be service benefits due and payable. When we look into the above judgment of this Tribunal in the above case, the principal amount of gratuity was already paid to the employee which has been noticed in paragraph 5 of the judgment, which is as follows: "5. Learned Sr. Counsel Mr. D. Ray Choudhuri argued that as per Section 14 of the Payment of Gratuity Act, 1972, the Gratuity disputes wou....
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....ration, workmen compensation, and all sums due from Provident Fund, Pension, Gratuity Fund or any other fund for the welfare of the workmen, maintained by the employer. Generally speaking, the 'Claims' of the workmen/employees may be classified as 'service claims' which arise during the terms of employment, in lieu of service rendered by the employee, salary, wages, bonus, dues etc., and 'welfare claims' which arise after cessation of employment, like 'Gratuity', 'Leave Encashment', Superannuation Dues, Workmen Compensation for closure of the entity which all depend on the tenure of the employment. Subsequent to the Company going into the Insolvency, all such claims may be submitted in Form D under Regulation 9 of the (Insolvency and Bankruptcy) CIRP Regulations, 2016. But seeking to initiate CIRP on the ground that 'LTC' and 'EL Encashment' has not been paid, which fall within the ambit of service benefits/welfare benefits cannot be said to be the intent and objective of the Code. 10. We are also conscious of the fact that the Principal Gratuity amount was paid to the Appellant on 17/02/2022 and deciding the question of interest is not within the domain of IBC. Hence, thi....
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....r from raising a claim against the Plaintiff company and/or its present Management based on the financial statements of the Plaintiff Company issued in the past by the erstwhile management or the Plaintiff Company;" 24. Suit No. 500/2017 was filed on May, 2017. The said suit cannot be said to be raising any dispute regarding the claim of the workmen. The prayer was with regard to compromise proposal by the corporate debtor, which was claimed that should not be treated any admission of the claim against the company or management. The said suit cannot constitute any pre-existing dispute with regard to claim of the workmen. The next suit which has been relied by the appellant is Suit No. 2506/2017. The date of filing of the said suit is relevant which is 15.12.2017, why the said date is relevant is noticed hereinafter. 25. We have noticed above that the JK Jute Mazdoor Morcha has filed the Writ Petition in the Delhi High Court being Writ Petition 440/2017, which Writ Petition was filed by JK Jute Mazdoor Morcha after their application under Section 9, was rejected on 28.03.2017. In the said Writ Petition, Delhi High Court directed by interim order 26.05.2017 to preserve an amoun....
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....is Hon'ble Court deem fir and proper in the facts and circumstances of the case and in the interest of justice." 27. Along with the suit, a list of retired workmen was annexed in which the R-1 Devi Prasad was also mentioned as serial number 425. When the company before the Delhi High Court agreed that workers can file their claim under Sections 8 & 9 and 06.12.2017, on which stand the Writ Petition was disposed of, filing of suit of 15.12.2017, restraining the workmen regarding their dues is mala fide on part of the company/corporate debtor and cannot be termed to be raising a dispute regarding the claim. There is one more reason due to which the plea of pre-existing dispute raised by the appellant has to be rejected. 28. We have noticed that JK Jute Mazdoor Ekta Union has filed Section 9 application after giving a notice under Section 8, which application was for claiming outstanding dues of 3000 workers. Notice under Section 8 before filing the Section 9 application by JK Jute Mazdoor Ekta Union was given on 14.03.2017, which has been noticed by the Hon'ble Supreme Court in its judgment of JK Jute Mazdoor Morcha. It is useful to notice paragraph 2 of the judgment, which....
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....pleaded: "13. I say that while adjudicating the instant appeal, this Hon'ble Appellate Tribunal may consider the claim of the deponent herein against the Corporate Debtor. I say that the deponent in view of the undisputed claim has already filed Insolvency petition before NCLT, Allahabad bearing C.P. (IB)/280/ALD/2018. Copy of the demand notice and Insolvency Petition (Form-5) are annexed herewith and marked as ANNEXURE- E." 31. What was stated by R-1 that his claim may also be adjudicated in the appeal and he authorises JK Jute Mazdoor Morcha to represent his case. We have noticed the judgment of this Tribunal in JK Jute Mazdoor Morcha. Judgment of this Tribunal dated 17.03.2023, where this Tribunal dismissed the appeal filed by JK Jute Mazdoor Morcha holding that application filed under Section 9 by JK Jute Mazdoor Morcha was premature since it was filed within 10 days from delivery of demand notice. Date of delivery was held on 21.03.2017 and petition was filed on 28.03.2017, hence it was held as premature. The order passed by the adjudicating authority rejecting Section 9 application by JK Jute Mazdoor Morcha shall be merged with order dated 17.03.2023 of this Tribu....