TMI Blog2019 (5) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... burdensome as each workman would thereafter have to pay insolvency resolution process costs, costs of the interim resolution professional, costs of appointing valuers, etc. under the provisions of the Code read with Regulations 31 and 33 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Looked at from any angle, there is no doubt that a registered trade union which is formed for the purpose of regulating the relations between workmen and their employer can maintain a petition as an operational creditor on behalf of its members Trade union represents its members who are workers, to whom dues may be owed by the employer, which are certainly debts owed for services rendered by each individual workman, who are collectively represented by the trade union. Equally, to state that for each workman there will be a separate cause of action, a separate claim, and a separate date of default would ignore the fact that a joint petition could be filed under Rule 6 read with Form 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, with authority from several workmen to one of them to fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade union filed as an operational creditor would be maintainable. Shri Gaurav Kejriwal, learned Advocate appearing on behalf of respondent No.2 has supported the arguments advanced by Shri Gopal Jain. 3. On the other hand, Shri Navaniti Prasad Singh, Shri Jayant K. Sud, and Shri Anip Sachthey, learned Senior Advocates appearing on behalf of respondent No.1 supported the NCLAT judgment to argue that as no services are rendered by a trade union to the corporate debtor to claim any dues which can be termed as debts, trade unions will not come within the definition of operational creditors. That apart, each claim of each workman is a separate cause of action in law, and therefore, a separate claim for which there are separate dates of default of each debt. This being so, a collective application under the rubric of a registered trade union would not be maintainable. 4. Section 5(20) of the Code defines operational creditor as follows: 5. Definitions.-In this Part, unless the context otherwise requires,- xxx xxx xxx (20) operational creditor means a person to whom an operational debt is owed and includes any person to whom such d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priate Government means, in relation to Trade Unions whose objects are not confined to one State, the Central Government, and in relation to other Trade Unions, the State Government, and, unless there is anything repugnant in the subject or context,- xxx xxx xxx (h) Trade Union means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions; xxx xxx xxx Equally, trade disputes under the said Act are defined under Section 2(g) as follows: 2. Definitions.-In this Act, the appropriate Government means, in relation to Trade Unions whose objects are not confined to one State, the Central Government, and in relation to other Trade Unions, the State Government, and, unless there is anything repugnant in the subject or context,- xxx xxx xxx (g) trade dispute means any dispute between employers and workmen or between wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy (Application to Adjudicating Authority) Rules, 2016 also recognises the fact that claims may be made not only in an individual capacity, but also conjointly. Further, a registered trade union recognised by Section 8 of the Trade Unions Act, makes it clear that it can sue and be sued as a body corporate under Section 13 of that Act. Equally, the general fund of the trade union, which inter alia is from collections from workmen who are its members, can certainly be spent on the conduct of disputes involving a member or members thereof or for the prosecution of a legal proceeding to which the trade union is a party, and which is undertaken for the purpose of protecting the rights arising out of the relation of its members with their employer, which would include wages and other sums due from the employer to workmen. 7. The Bombay High Court in Sanjay Sadanand Varrier (supra), after setting out various provisions of the Trade Unions Act, including Section 15, has held: 13. As can be seen from the said section, Registered Trade Unions can prosecute or defend any legal proceeding to which the Trade Union or member thereof is a party, when such prosecution or defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the NOIDA authority was established as an authority under the State Act. While dealing with several judgments of this Court, the Court, in paragraphs 20, 24, and 25, followed judgments stating that a company incorporated and registered under the Companies Act cannot be said to be established under the Companies Act. The context of Section 3(23) of the Code shows that this judgment has no application to the definition contained in Section 3(23). Here, a person includes a company in clause (c), and would include any other entity established under a statute under clause (g). It is clear that clause (g) has to be read noscitur a sociis with the previous clauses of Section 3(23). This being the case, entities such as companies, trusts, partnerships, and limited liability partnerships are all entities governed by the Companies Act, the Indian Trusts Act, and the Partnership Act, which are not established under those Acts in the sense understood in Canara Bank (supra) and the judgments followed by it. The context, therefore, in which the phrase established under a statute occurs, makes it clear that a trade union, like a company, trust, partnership, or limited liability p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titiae where the tragic sequel otherwise would be wholly inequitable. Justice is the goal of jurisprudence - processual, as much as substantive. 29. In State of Punjab v. Shamlal Murari [(1976) 1 SCC 719 : 1976 SCC (L S) 118] the Court approved in no unmistakable terms the approach of moderating into wholesome directions what is regarded as mandatory on the principle that: (SCC p. 720) Processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. Procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice. In Ghanshyam Dass v. Dominion of India [(1984) 3 SCC 46] the Court reiterated the need for interpreting a part of the adjective law dealing with procedure alone in such a manner as to subserve and advance the cause of justice rather than to defeat it as all the laws of procedure are based on this principle. This judgment was followed by the Constitution Bench decision in Sarah Mathew v. Institute of Cardio Vascular Diseases and Ors., (2014) 2 SCC 62 [at paragraph 49]. 11. The NCLAT, by the impugned judgment, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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