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2022 (5) TMI 493 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - dues pertaining to LTC and Leave Encashment - existence of debt and default or not - HELD THAT:- It is not the case of the Appellant that the amounts claimed are due towards any emoluments/salary for the services rendered by him to the ‘Corporate Debtor’, while he was in service. Though ‘service benefits’ like ‘LTC’ accrue, on account of the service rendered during the period of employment, the scope and objective of the Code is simply not just for recovery of ‘dues’ but Resolution of the Companies meant for ‘maximisation of the value of assets’, to promote entrepreneurship, availability of credit and balance all interest of the stakeholders. Employees and workmen do constitute a major part of the stakeholders. The term ‘employee’ in general parlance refers to a person, who is hired by the employer to perform a particular job and is entitled to a specific wage or salary. Section 3(36) of the Code states that the term ‘workmen’ shall have the same meaning as provided under Section 2(s) of the Industrial Disputes Act, 1947. For the purpose of the Code, the term ‘workmen dues’ has to be interpreted in terms of explanation to Section 326 of the Companies Act, 2013. As per the definition incorporated therein, the dues would cover wages and salary, accrued holiday remuneration, 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. 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. 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, this Tribunal is of the considered view that there is no illegality or infirmity in the well-considered Order of the Adjudicating Authority - Appeal dismissed.
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