Surendra Singh Hada & Ors vs Arfat Petrochemicals Private Limited

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

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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

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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

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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

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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.

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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

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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)

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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.

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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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Page 20 of 21

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/

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Page 21 of 21