National Company Law Appellate Tribunal
Surendra Singh Hada & Ors vs Arfat Petrochemicals Private Limited on 25 January, 2023
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
COMPANY APPEAL (AT) (Ins)NO.578 OF 2021
In the matter of:
Surendra Singh Hada & Ors Appellants
Vs
Arfat Petrochemicals Pvt Ltd Respondent
Present:
For Appellant: Mr Pankaj Jain, Mr. Sarthak Dugar, Mr. Rishabh
Jain, Advocates.
For Respondents: Mr. Arvind Kumar Gupta, Ms. Heena George,
Ms. Shivani Sharma, Advocates.
With
COMPANY APPEAL (AT) (Ins) No.803 OF 2021
In the matter of:
Arfat Petrochemicals Pvt Ltd Appellant
Vs
Surendra Singh Hada & Ors Respondents
Present:
For Appellant: Mr. Arvind Kumar Gupta, Ms. Heena George, Ms.
Shivani Sharma, Advocates.
For Respondents: Mr Pankaj Jain, Mr. Sarthak Dugar, Mr.
Rishabh Jain, Advocates.
COMPANY APPEAL (AT) (Ins)NO.578 OF 2021
COMPANY APPEAL (AT) (Ins) No.803 OF 2021
Page 1 of 21
JUDGMENT
(Date: 25.1.2023) [Per. Dr. Alok Srivastava, Member (Technical)]
1. The two appeals being dealt in this judgment, namely, Company Appeal (AT) (Ins) No.578/2021 (filed by Appellant Surendra Singh Hada & Ors.) and Company Appeal (AT) (Ins) No.803/2021 (filed by Appellant Arfat Petrochemicals Pvt. Ltd.) are preferred under section 61 of the Insolvency and Bankruptcy Code, 2016 (in short 'IBC'). The Appellants in both the appeals have assailed order dated 5.4.2021 in CP (IB)No.469/9/NCLT/ AHM/2018 with IA No. 18/2020 and IA No. 115/2020 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad) (hereinafter called 'Impugned Order').
2. The Appellant Surendra Singh Hada & Ors. are aggrieved by the Impugned Order as it has not found the section 9 application filed by the Appellants maintainable and have prayed for restoration of CP (IB) No.469/9/NCLT/AHM/2018 and connected IA No. 18/2020 and IA No 115/2020. The Appellant Arfat Petrochemicals Pvt. Ltd. (in short 'APPL') is aggrieved by that part of the Impugned Order whereby liberty has been granted to Appellants Surendra Singh Hada & Ors. to file COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 2 of 21 application under section 33(3) of IBC against the corporate debtor.
3. Leaving aside unnecessary details, the facts of the case, as stated by the Appellants in both the appeals, are that the company J.K. Synthetics Ltd. (in short 'JKSL') was declared a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 (in short 'SICA') vide order dated 2.4.1998 of Board of Industrial & Financial Reconstruction (in short 'BIFR') and further a Draft Rehabilitation Scheme in terms of section 28 of SICA was formulated for the sick company, whereby Arfat Petrochemicals Pvt. Ltd. was identified as purchaser of JKSL's Kota units and a Memorandum of Understanding was executed between JKSL and APPL whereby operation and management of JKSL's Kota units was transferred to APPL. Additionally, two Tripartite Labour Settlement Agreements (in short 'TLSA') were signed between KSL and APPL and workers and staff union of JKSL for payment of liabilities related to labour, amounting to Rs.43.69 crores. It is also stated by the Appellants that the Appellate Authority for Industrial and Financial reconstruction (in short 'AAIFR') sanctioned a Rehabilitation Scheme, named "SS-03/DRS" vide order dated 23.1.2003, which envisaged COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 3 of 21 takeover of the Kota units of JKSL by APPL. Further, the compliance of the sanctioned scheme "SS-03/DRS" continued to be monitored by AAIFR/BIFR.
4. It is the case of Appellants Surendra Singh Hada & Ors. the BIFR, after hearing the submission of workers/employees, JKSL and APPL, held vide its order dated 5.5.2008, that APPL had failed to comply with the terms and conditions of the two TLSAs dated 9.10.2022 and 22.102002 and the earlier Memorandum of Understanding. Further, BIFR held in its order dated 22.12.2009 that the industrial activities and operation of Kota based units have not been revived despite the availability of sufficient time and support. The matter relating to the implementation of the Rehabilitation Scheme of the sick units of JKSL went up to the Hon'ble Supreme Court and the Hon'ble Apex Court vide order dated 18.11.2016 in Civil Appeal Nos. 8597, 8598 and 8599 of 2010 held that BIFR has the jurisdiction to review the implementation of the sanctioned rehabilitation scheme and pass suitable directions. The Appellants have further stated that as a result of the enactment of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, the proceedings in respect of monitoring of implementation of the COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 4 of 21 rehabilitation scheme abated due to dissolution of BIFR and other bodies formed under SICA. The Appellants Surendra Singh Hada and Ors. have further stated that, thereafter a demand notice under section 8 of IBC dated 11.6.2018 was served on APPL by the ex-workers regarding non-payment of dues and non- compliance of the rehabilitation scheme and subsequently CP(IB) No. 469/NCLT/ AHM/2018 was filed on 4.9.2018 under section 9 of the IBC for initiation of CIRP against the corporate debtor APPL, whereupon after due hearing, the Impugned Order was passed by the Adjudicating Authority.
5. We heard the oral arguments presented by the Learned Counsels for both the parties and perused the record.
6. The Learned Counsel for Appellants Surendra Singh Hada and Ors. has claimed that the claims of workmen and employees were not paid by APPL despite the two TLSAs, which were signed between the parties, and which APPL was obliged to comply with. He has referred to the order of AAIFR in CA No. 301/2000 dated 7.1.2005 to contend that the company APPL has defaulted in payment of the dues of the workmen. He has further referred to the bar to coercive action under section 22 of SICA to claim that COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 5 of 21 during the period starting with the sanction of rehabilitation scheme till repeal of SICA the workers could not take any coercive action against APPL for payment of their dues and therefore, the matter of forcing payment of workers dues could not be pursued by the workers and hence this period should be excluded while calculating limitation of the section 9 application.
7. The Learned Counsel for Appellants Surendra Singh Hada & Ors. has further referred to the repeal of SICA by the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 and its amendments brought about in response to section 252 of the IBC to claim that any reference made or initially pending before BIFR or any proceedings of whatever nature pending before the AAIFR or BIFR under SICA stood abated and therefore, the workers have filed an application under section 9 of the IBC for payment of their past dues as operational debt which is due and payable and in default of payment. He has further contended that the payment due to the workers is an operational debt under IBC and default in its payment has been continuing from the date of sanction of rehabilitation scheme and thus the default of payment of operational debt of workers is within limitation as required under IBC. He has referred to the judgment of this COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 6 of 21 Tribunal in the matter of Mr. Gouri Prasad Goneka v. Punjab National Bank & Anr. [CA (AT) (Ins.) No. 28 of 2019] wherein it is held that once the corporate debtor was declared as a sick industrial unit by BIFR, which passed direction under section 21(1) of SICA, which was not possible for the secured creditor to take any coercive action against it, without prior permission of BIFR. He has thus contended that the period starting from the date when the corporate debtor was declared as sick industrial unit by BIFR till the date when SICA was repealed and IBC was brought into force w.e.f. 1.12.2016 stands excluded for the purpose of computation of period of limitation.
8. The Learned Counsel for Appellants Surendra Singh Hada & Ors. has referred to the orders dated 24.92020 and 18.11.2016 of the Hon'ble Supreme Court in Civil Appeals No. 8597/2010, 8597/2010 and 8599/2010, whereby the BIFR was held to have jurisdiction to review the implementation of the rehabilitation scheme. He has thus claimed that after the enactment of IBC and its coming into force from 1.12.2016 and repeal of SICA he has taken recourse to IBC in filing section 9 application on 4.9.2018. Thus, he has claimed that only 643 days have expired COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 7 of 21 in counting the period of limitation and the Section 9 application is within limitation.
9. Furthermore, the Learned Counsel for Appellants Surendra Singh Hada & Ors. has argued that the operational debt of the workers under section 5(20) of the IBC is well established in view of the orders of BIFR/AAIFR and due to non- payment of outstanding debt it is in default as required under section 3(12) of the IBC, and as the application has been filed within limitation, it is a fit case for admission of section 9 application and initiation of CIRP against APPL. He has further contended that the Adjudicating Authority has committed an error by directing that the workmen could file application under section 33(3) of the IBC as operational creditors instead of admitting section 9 application preferred by workmen.
10. The Learned Counsel for Respondent APPL has focused on the pleadings in appeal CA(AT)(INS) No. 578 of 2021 with regard to his oral arguments. He has brought to our attention the prayer made by the Appellants Surendra Singh & Ors. in their section 9 application and pointed out that the prayer very clearly sought an amount of Rs. 5 lakhs as interim relief for those employees, COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 8 of 21 who have not taken the amount of their financial settlement. He has argued that APPL has made sincere endeavour to pay past claims of workmen since 2007, but if workmen have decided not to accept such amounts it is not the fault of the corporate debtor APPL. He has contended that NCLT does not have jurisdiction to entertain and adjudicate issues arising out of the sanctioned rehabilitation scheme approved by erstwhile BIFR where implementation is completed, and in the SICA Repeal Act, 2003, section 5 provides that schemes sanctioned by BIFR are saved and continue to be binding even after dissolution of AAIFR/BIFR. He has further referred to the judgment dated 25.10.2018 of Hon'ble Supreme Court in the matter of Spartek Ceramics India Limited vs. Union of India & Ors. (Civil Appeal 7291-7292 of 2018) wherein it is held that the notification issued by the Central Government S.O. 1683(E) dated 24.05.2017 travels beyond the scope of the 'removal of difficulties' provision, and therefore, a scheme sanctioning rehabilitation of a sick industrial company under SICA is not deemed to be an approved resolution plan under section 31(1) of the IBC, and the matters relating to such a scheme are not liable to be dealt with in accordance with Part-II of the IBC. He has thus claimed that the NCLT does not have jurisdiction to look into any aspect of non-implementation COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 9 of 21 of sanctioned rehabilitation scheme under SICA and the jurisdiction of BIFR to monitor sanctioned rehabilitation scheme has been upheld by Hon'ble Supreme Court in its judgment dated 18.11.2016 in Civil Appeal Nos. 8597, 8598 and 8599 of 2016 and, therefore, the section 9 application is not maintainable.
11. The Learned Counsel for Respondent APPL has also referred to sections 15, 16, 18, 18(3) and 18(4) of the erstwhile SICA to point out that these provisions provided an elaborate framework starting with reference regarding a sick industrial company to be made before the BIFR up to the sanction of a rehabilitation scheme under section 18(4). He has also pointed out that sub-sections 8 to 12 of Section 18 of SICA empower the BIFR to oversee and monitor implementation of the said sanctioned scheme, which act has been performed by BIFR and AAIFR.
12. The Learned Counsel for Respondent APPL has also explained that while section 22 of the erstwhile SICA allows suspension of specified coercive actions against sick industrial companies, section 22(1) gives power to any person to move against the company with the consent of BIFR or AAIFR. He has COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 10 of 21 added that in the present case, there is enough evidence to show that full efforts to pay workers' dues were made and, therefore, no worker can now claim default in payment of his/her dues.
13. The Learned Counsel for the Respondent APPL has cited the judgment of the three-member bench presided over by Hon'ble Chairperson, NCLAT in the matter of Pramod Kumar Pathak vs. Arfat Petrochemicals Pvt. Ltd. (Judgment dated 12.12.2012 in CA(AT)(INS) No. 312 of 2022), wherein the Hon'ble NCLT, after noticing and following the judgment of Hon'ble Supreme Court in the matter of Spartek Ceramics India Ltd. (supra), held that any application filed under sections 33 and 34 of the IBC in relation to a previously sanctioned scheme for rehabilitation of the sick company JKSL under SICA is not maintainable. He has further claimed that in light of the judgment of Hon'ble Supreme Court in Spartek Ceramics India Ltd. (supra) case, any issue relating to execution/ implementation of a previously sanctioned rehabilitation scheme cannot be considered under IBC, and, therefore, the order of the Adjudicating Authority directing that the workers have the liberty to file application under section 33 of IBC against the corporate debtor is erroneous.
COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 11 of 21
14. The Learned Counsel for the respondent APPL has further referred to the judgment of Hon'ble NCLAT in the matter of GAIL vs. M/s. Neycer India Ltd. [Judgment dated 29.01.2019 in CA(AT)(Insolvency) No. 294 of 2018] and also the order of Hon'ble NCLAT in the matter of Agarpara Company Ltd. vs. Agarpara Jute Mills Company Ltd. & Ors. [Judgment dated 27.3.2019 in CA (AT) Insolvency No. 289 of 2019] to point out that in both the cases, Hon'ble NCLAT noticed the judgment of Hon'ble Supreme Court in the matter of Spartek Ceramics India Ltd. (supra) to hold that in the matter of sanctioned scheme for revival/rehabilitation, the jurisdiction of NCLT is barred. He has also argued that in the matter of Hada Textile Industries Limited vs. Sales Tax Officer, Commercial Taxes [CA(AT)(Ins) No.325 of 2017, judgment dated 18/9/2018], Hon'ble NCLAT has held that there is no provision in IBC to review a scheme earlier sanctioned under SICA.
15. Lastly, the Learned Counsel for Respondent APPL has referred to the judgment dated 28.7.2009 of the Hon'ble High Court of Rajasthan in D.B. Civil Writ Petition No. 2006 of 2009, wherein one of the issues under consideration was the COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 12 of 21 payment of dues to the workers. He has pointed out that it is noticed in the said judgment that a retired Hon'ble Justice Mr. N.N. Mathur was appointed by the State Government of Rajasthan as caretaker to identify and make payments to genuine workers of erstwhile JKSL and that the workers were given full opportunity to present their claims before to Hon'ble Justice Mr. N.N. Mathur. In the light of such an arrangement made by the State Government of Rajasthan, the Learned Counsel for Respondent has claimed that it does not now lie with the workers/employees to claim that any past due as 'operational debt' which is due and payable and in default; and if such a due was either not claimed or not accepted by the workers, it is entirely their responsibility and such workers cannot now claim any default in payment of their dues, and moreover such a matter is, therefore, a dispute between the corporate debtor and the workers.
16. We first look at the issue raised by the Appellant APPL in CA (AT)(Ins) No. 803 of 2021 as to whether the Adjudicating Authority was correct in giving liberty to the operational creditors to file application under section 33(3) of IBC. In the above connection, we have already noticed the judgment dated COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 13 of 21 12.12.2022 of the three-members bench of this Tribunal in CA(AT)(Ins.) No. 312 of 2022. We reproduce the relevant portion of this judgment for appreciation: -
"19. We are of the view that judgment of the Hon'ble Supreme Court in M/s. Spartek Ceramics India Ltd. is a law declared by the Hon'ble Supreme Court, where Hon'ble Supreme court has specifically approved the view of this Appellate Tribunal that Notification dated 24.05.2017 travels beyond the scope of removal of difficulties provisions.
20. We, thus, are of the view that no error has been committed by the Adjudicating Authority in rejecting Application filed by the Appellant under Sections 33 and 34. There is no merit in the Appeal. The Appeal is dismissed. No costs."
17. The above referred judgment in Pramod Kumar Pathak (supra) has clearly noticed the judgment of Hon'ble Supreme Court in the matter of Spartek Ceramics India Ltd. (supra). The Spartek Ceramics India Ltd. judgment (supra) is also noticed by this tribunal in its judgment in CA(AT)(INS.) No. 312/2022 as also in CA(AT)(INS) No. 294 of 2018 in the matter of GAIL (supra) and CA(AT)(INS.) No. 289 of 2019 in the matter of Agarpara Company Ltd. (supra). Thus, it is amply clear that the notification dated 24.5.2017 issued by Central Government goes beyond the remit of removal of difficulties provision of IBC. COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 14 of 21
18. We are, therefore, of clear view that liberty given by the Adjudicating authority in the Impugned Order to the operational creditor to file an application under section 33(3) of IBC is erroneous. While holding such a view we also note that the Adjudicating Authority in passing the Impugned Order has not noticed the law laid down by the Hon'ble Supreme Court in the matter of Spartek Ceramics India Ltd. (supra).
19. The other issue to be considered is whether the operational debt claimed by the appellants Surendra Singh Hada and Ors.is an 'operational debt' as defined in IBC and whether it is in default and due for payment by the corporate debtor.
20. In this connection, we note that the sanctioned scheme for rehabilitation of JKSL was approved by AAIFR in the year 2005 and thereafter the implementation of the sanctioned scheme took place. During the implementation of the sanctioned rehabilitation scheme, the ex-workers and employees of the Appellant APPL raised the issue of non-payment of their past dues as per the TLSAs, and this issue was also considered by the Division Bench of Hon'ble High Court of Rajasthan in Civil Writ COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 15 of 21 Petition No. 2006 of 2009. The observations made in the judgment dated 28.7.2009 is extracted below:-
"18. The admitted facts are that the Respondent No. 12 representing the Rajasthan Trade Union Kendra has categorically submitted in its reply that the TLSAs dated 09.10.2002 and 22.10.2002 entered into by the labour unions/staff association and the petitioner company have been terminated vide notices dated 03.03.2008 and 04.03.2008. Vide TLSAs a sum of Rs. 43.69 was prescribed towards the liability of the labour/staff of the JKSL. The petitioner company has made the payment to the extent of over Rs. 27 crores and Rs. 10 crores have been deposited with the State Bank of Bikaner and Jaipur, Kota Branch for making payment of the dues to the workers. The State Government has appointed retired Justice Mr. N.N. Mathur, as care taker to identify and make payment to the genuine labourers.
19. It appears that the workers after receiving the payment have issued notices for disassociating. themselves. The record reveals that the plaintiffs-workers approached the civil courts by way of civil suits for adjudication of their claims and the civil court dismissed their suits observing that the dispute involved in the suits gives rise to an industrial dispute and the plaintiffs, workers can seek redressal under the provisions of Industrial Disputes Act, 1947. Similarly, it is obvious that once the workers have disassociated TLSAs and the civil courts have also directed that their claim/dispute, if any, can be adjudicated under the Industrial Disputes Act, 1947, in such a situation the workers cannot agitate and canvass for enforcement of the Agreement executed, to which earlier they were party and after receiving the wages they have disassociated. The claims of. The workers, if any, are also secured and can be presented before Justice Mr. N.N. Mathur, care taker appointed by the Government of Rajasthan for its adjudication."
(Emphasis Supplied) COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 16 of 21
21. Thus, it is clear that claims of workers were being paid under the monitoring and supervision of retired Hon'ble Justice Mr. N.N. Mathur appointed by the State Government of Rajasthan. We further note that various news items were published in widely circulated newspapers Dainik Bhasker on 19.03.2009, Rajasthan Patrika in editions of Kota/Jaipur/Jodhpur/Udaipur on 25.5.2008 and Dainik Jagran in editions of Gorakhpur/ Varanasi/Kanpur on 25.5.2008. The substance of these public notices is that those workers/employees who have not received their past payment as admissible under the Tripartite Labour Settlement Agreements dated 9.10.2002 and 22.10.2002 should contact the Personnel Department of APPL, Kota, Acrylit Plant to receive the cheques of their due payments on any day between 1.6.2008 and 31.5.2009. Obviously, the issue of payment of past dues of former workers/employees of JKSL was being honoured by APPL and also overseen by the State Government of Rajasthan through Hon'ble Justice Mr. N.N. Mathur.
22. Further, we note a report submitted by Hon'ble Justice Mr. N.N. Mathur, former Judge of Rajasthan High Court to the Principal Secretary, Labour and Employment, Government of COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 17 of 21 Rajasthan (attached at pp.803-814 of appeal paperbook, Vol.IV in CA(AT)(Ins) No. 803 of 2021). The report contains extensive details regarding payment made to ex-employees/workers of JKSL. This inspection report for the month of March, 2012 which makes it clear that the matter of payment of full and final dues of the ex-workers as per TLSA was being made and monitored regularly. It is, therefore beyond our understanding as to why the appellants Surendra Singh Hada and Ors. have not availed of this opportunity of getting payment of their past dues. Nor they have mentioned in their appeal any such action being taken under the supervision of Justice Mr. N.N. Mathur. On this ground, we do not think the corporate debtor has committed any default in payment of debt. Thus, the requirement for admission of section 9 application that there should be operational debt, which in default is clearly not satisfied in the present case.
23. We also note that in the appeal memo filed by Appellants Surendra Singh Hada and Ors. in appeal CA(AT)(Ins) no. 578 of 2021, the actions taken by the State Government of Rajasthan for ensuring payment and the APPL for payment of part dues of ex-workers has not been brought to the notice of this bench. COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 18 of 21 Such information clearly weakens the case of the Appellants Surendra Singh Hada and other workers.
24. When we take a holistic view of the matter of payment of past dues to ex-employees, it is clear that there is no clarity about the past dues as to what was paid and what remained unpaid and also the default on the part of the corporate debtor APPL is not established, since right from 2007 onwards the corporate debtor and earlier JKSL has continued to make sincere efforts to pay such past dues. We are, therefore, quite clear that the default in payment of past dues as claimed by the Appellants Surendra Singh Hada and Others is not established in the present case.
25. We also note the judgment of this Tribunal in the matter of Mr. Gouri Prasad Goneka (supra), wherein the following was held:-
"On a plain reading of these provisions, it is manifestly clear that the remedy for the enforcement of right by the Creditor to recover the outstanding debt from the Debtor through the medium of a suit for recovery of money remains suspended for the period during the pendency of inquiry under Section 16, 17 or appeal under Section 25 of SICA. Admittedly, in the instant case the Corporate Debtor was declared as a Sick Industrial Unit by BIFR vide order dated 16th July, COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 19 of 21 2009 which passed direction under Section 22(1) of SICA to Secured Creditors not to take any coercive action against it without prior permission of BIFR....."
26. It is clear from a reading of the said observation of this Tribunal that coercive action against the corporate debtor can be taken by the creditor after obtaining permission from BIFR. There is no evidence submitted by the Appellants Surendra Singh Hada and Ors. that any prior permission of BIFR/AAIFR was either obtained or attempted to be obtained by the ex-workers. Furthermore, we also note that the corporate debtor has not acknowledged any outstanding debt of the ex-workers/ employees, but on the contrary it has submitted record of proceedings and order of the division bench of the Hon'ble High Court of Rajasthan, and a copy of the report submitted by the Hon'ble Justice Mr. N.N. Mathur to show their successive attempts and efforts made by the corporate debtor to pay past dues of ex-workers. The publication of public notices in newspapers as stated earlier in this judgment, also show the bonafide of the corporate debtor in making the past payments of ex-workers. Thus, in fairness, if the ex-workers now raise the issue of non-payment of their past dues, we are of the view that such a debt would be seriously disputed.
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27. In the light of the aforementioned discussion, we are of the clear view that the Impugned Order insofar as it gives liberty to the purported operational creditor Surendra Singh Hada and 125 other employees to file application under section 33(3) of the IBC is not in accordance with law. We also come to the conclusion that in their application under section 9 the appellants Surendra Singh Hada & Ors. have not been able to establish that the corporate debtor APPL committed a default which is ascribable to APPL in payment of any past dues of the ex-workers. We, therefore, set aside the Impugned Order in its entirety and dispose of the appeal accordingly.
28. There is no order as to costs.
(Justice Rakesh Kumar) Member (Judicial) (Dr. Alok Srivastava) Member (Technical) New Delhi 25th January, 2023 /aks/ COMPANY APPEAL (AT) (Ins)NO.578 OF 2021 COMPANY APPEAL (AT) (Ins) No.803 OF 2021 Page 21 of 21