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TMI Blog2021 (4) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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 Creditor on 23.03.2021. The matter is being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by Hon'ble BIFR is annexed at "Annexure-AA/10 - Pg. 134-159" of the Additional Affidav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 excluded u/s. 22 of SICA, 1985 02.04.1998 till 01.12.2016 E Date of filing of Section 9 application by the Appellant before the National Company Law Tribunal, Ahmedabad Bench. 04.09.2018 (4th September, 2018) F Total Period co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 natures of existence of dispute and held:- 33.............. Mere a dispute giving a colour of genuine dispute or illusory, raised for the first time while repining to the notice under Section 8 cannot be a tool to reject an application under Section 9 if the operational creditor otherwise satisfies the adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment 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 relevant para of the judgments are depicted below:- 4. ADMISSION OF DEBT BY THE CORPORATE DEBTOR BY PAYMENT TO ONE OF THE EMPLOYEE MENTIONED IN THE PETITION AS OPERATIONAL CREDITOR. Hon'ble Adjudicating Authority vide order dated 11.02.2020 allowed filing of I.A. 115 of 2020 to place on record additional documents related to payments made by CD One of the applicants herein, i.e. Mr. Ram Narayan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 and case was listed for arguments. d) Changes in Form 5 allowed by Adjudicating Authority. This issues is not res-integra and has already been dealt by this Hon'ble AA in Order dated 03.06.2020 passed by the NCLT, Ahmedabad Bench, in C.P. (IB) 227/NCLT/AHM/2018 and further upheld by Judgment of Hon'ble NCLAT in Rajendra Bhai Panchal vs. Shri Shalabh Kumar Daga, IRP of M/s. Yogi Infrastructures Private Limited passed in Co. Appl. (AT) (I) No. 592 of 2020 dated 20th October 2020. [copies of the judgment has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Pedersen Consultants India Pvt. Ltd. vs. Nitesh Estates Pvt. Ltd. Ratio - Merely disputing the quantum of Debt is no ground for dismissal of application. Claim means the right to payment even if it is disputed NCLAT 10, 11, 12 Rajendra Bhai Panchal vs. IRP of M/s. Yogi Infrastructures Private Limited. Co. Appl. (AT) (I) No. 592 of 2020 Ratio: Amendment in application (Form 5) allowed NCLAT 38, 40, 41 Gauri Prasad Goenka vs. PNB C.A.(AT) (Ins) No. 28 of 2019. Ratio: Application under IB Code maintainable due to exclusion of time, allowed under section 22(5) of SICA and is not barred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sives & 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 of the Code is fittest of the cases to be admitted for redressal of insolvency of the Corporate Debtor. The quantum of claims are also the subject matter to be decided and verified by the learned Resolution Professional under the supervision of this Hon'ble Adjudicating Authority and debt having statutory genesis and character arising out of BIFR/AAIFR sanctioned Scheme. What is required to be seen is that the debt defaulted is in excess of the statutory limit of Rupees One Lakh (Rs. 1,00,000/-) and their being no real pre-existing dispute under the Code on the quality of services and the Application Not being barred by limitation, the Application deserves to be admitted, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 rejected and the insolvency petition ought to be dismissed at the threshold. It is further submitted that order of Mazda Agencies vs. Hemant Plastics & Chemicals Ltd. is applicable in the present case because Hon'ble NCLT in Mazda Agencies vs. Hemant Plastics & Chemicals Ltd. dated 07.07.2020 relied on the judgment of Hon'ble Supreme Court in Gaurav Hargovindbhai Dave vs. Assets Reconstruction Company Ltd. & Anr. wherein distinction between suit and application has been brought out while deciding that Article 137 of Limitation Act, 1963 would be applicable and not the Article 62 of Limitation Act in case of application filed under IBC, 2016. (Copy of NCLT and NCLAT judgment of Mazda Agencies is attached and annexed as 'Annexure W-2 Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 64, 66, 90, 95 and 131 have been removed and Sr. 10 and 58 added new in fresh Form-5. Also, the dues of employee at S. No. 58 of the new documents has already been paid by the Respondent on 11.02.2010. 8. Further it is submitted that applicant relied on Hon'ble NCLAT judgment of Rajendra Bhai Panchal vs. Jay Manak Steels dated 3.06.2020 in which Hon'ble NCLAT rejected the appellant objection on rectification of debt amount in Form 5 by stating that Amendment was not of the character of changing the debt amount and that the same was allowed as per order dated 14.10.2019 of Hon'ble Adjudicating Authority. 9. However, it is not applicable on present facts because in present case amendment with respect to Form 5 was never prayed before Hon'ble Adjudicating no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication 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 to how simple issues can be complicated inadvertently. As noted from the written submissions made by the Operational Creditor, issues involved is implementation of BIFR Scheme approved by the AAIFR which is to be treated as an approved resolution plan in terms of provisions of Section 252 r.w. EIGHTH SCHEDULE of Insolvency and Bankruptcy Code, 2016. Once this is so, application under Section 9 of Insolvency and Bankruptcy Code, 2016 is as such not maintainable because for non-implementation for an approved resolution plan, a different application has to be made as per the provisions of Section 33(3) of Insolvency and Bankruptcy Code, 2016. For the sake of convenience, Section 252 r.w. EIGHTH SCHEDULE thereto and Section 33(3) are reproduced as under: 252. Amendments of Act 1 of 2004.- The Sick Industrial Companies (Special Provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected 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 inserted in the EIGHTH SCHEDULE with effect from 24.05.2017 by the Insolvency Bankruptcy Code (removal of difficulties) order, any scheme sanctioned or under implementation in terms of provisions of SICA Act, 1985 is deemed to be an approved resolution plan and the same is to be dealt with in accordance with Part-II of the Code. Part-II of the Code pertains to Corporate Insolvency Resolution Process and also provide for passing of an order of liquidation under Section 33(2) of Insolvency and Bankruptcy Code, 2016 in case an approved resolution plan is not implemented. Any aggrieved party can initiate such action. Accordingly, we hold that this application is not maintainable and therefore, rejected. (ii) Even otherwise, such application, in our view, is not maintainable because this application has been filed after expiry of 643 days from 01.12.2016, being the date of Insolvency and Bankruptcy Code, 2016 becoming effective and as per the 2nd proviso of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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