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8. The workmen and employees of the Corporate Debtor and several Operational Creditors challenged the order of the NCLT dated 22.06.2021 by which the Resolution Plan was approved before the NCLAT. Vide order dated 21.10.2022, the NCLAT upheld the order of the NCLT dated 22.06.2021. However, it was observed that the workmen and employees are entitled to the payment of their full provident fund and gratuity which was unpaid as on the insolvency commencement date and that the balance of the above dues should be paid by the Successful Resolution Applicant i.e., Respondent No.1, in order to satisfy its statutory obligations. It was further stated that “Non-payment of full PF and Gratuity shall lead to violation of Section 30(2)(e) and hence, to save the plan, the above payments have to be made”. On 20.12.2022, Respondent No.1 preferred Civil Appeal Nos. 465-469 of 2023 against the aforesaid order dated 21.10.2022 passed by the NCLAT, before this Court.

77. It was submitted that the NCLAT order dated 28.08.2023 rightly recognized that Regulation 36B(4A) of the 2016 Regulations only provides for the PBG requirement for the purposes of the RFRP and the same has been complied with by the SRA. Further, the counsel pointed out that Clause 6.4.4 (a)(i) elaborates on the “Committed Cash Payments” to be made to the Financial Creditors. In the table, under the heading “Date of release of Security”, the PBG of Rs. 150 Crore was not mentioned while the other two forms of security find a mention. Thus, the intention was that, the PBG be adjusted in making the first tranche payment.

82. On workmen and employees’ dues, it was submitted that, as per Clause 6.4.2 on the “Summary of Financial Proposal” the amount demarcated for all the claims related to employees or workmen was Rs. 52 Crore and as per the Implementation Schedule, these claims were to be paid within 175 days from the Effective Date. However, the NCLAT vide its order dated 21.10.2022 increased it to Rs. 113 Crore since it was the minimum liquidation value that they were entitled to as per the estimates of the RP. The final directions issued by the NCLAT in the aforesaid order conveyed that the workmen and employees are entitled to the payment of unpaid PF and gratuity till the Insolvency Commencement Date and the RP was directed to compute such payment within 30 days. The RP had calculated such amounts to be Rs. 14 Crore towards PF and Rs. 188.7 Crore towards gratuity. It was submitted that neither the NCLAT order dated 21.10.2022 nor the order of this Court dated 30.01.2023 had provided any specific timelines for fulfillment of these additional liabilities which were cast upon the SRA. This is precisely why the SRA proposed to pay Rs. 14 Crore towards PF upfront in compliance with Section 11 of the PF Act and pay the Gratuity dues of Rs. 188.2 Crore in a staggered manner.

b. Whether the NCLAT could have directed the Performance Bank Guarantee (PBG) to be adjusted against the first tranche payment which was to be made within 180 days of the Effective Date?

98. There is no dispute to the fact that the Effective Date was frozen on 20.05.2022. Therefore, as per Clause 6.3.1(g) on the “Infusion of Funds and Timelines”, and Serial No.11 under Clause 7.7, the first tranche payment of Rs. 350 Crore had to be made by the SRA, upfront, within a period of 180 days from the Effective Date i.e., 20.05.2022. As per the Resolution Plan, this 180-day timeline otherwise would have expired on 16.11.2022. Several extensions were granted to the SRA to infuse this amount, at different stages of this litigation, by the NCLT, the NCLAT and this Court as well - First, by the NCLT vide order dated 13.01.2023, by which the timeline for infusion of first tranche payment was extended till 15.05.2023; Secondly, by the NCLAT vide order dated 26.05.2023, where the timeline of 180 days was further extended up to 31.08.2023; Thirdly, again by the NCLAT vide order dated 28.08.2023, where the timeline of 180 days was extended up to 30.09.2023; and Fourthly, by this Court vide order dated 18.01.2024, whereby the time of 180 days for infusion was extended up to 31.01.2024.