Vikram Laxman Pawar vs Mr. Sripatham Venkatasubramaniam ...

Comp. App. (AT) (Ins) No. 1537 of 2023 & I.A. No. 5520, 5521 of 2024

(Arising out of the Order dated 10.10.2023 passed by the National Company Law Tribunal, Mumbai Bench in I.A. No. 4455 of 2023 CP (IB)/1330 (MB) 2020)

IN THE MATTER OF:

Vikram Laxman Pawar Aged about 39 years, Occ: Service R/o, At Post Lonand, Taluka Khandala District Satara, Maharashtra - 415521. ...Appellant

Versus

Mr. Sripatham Venkatasubramaniam Ramkumar, Resolution Professional of Privilege Industries Ltd. 1605, Block 1, Myhome Vihanga, Gachibowli, Hyderabad, Telangana 500032. ...Respondent

Present

For Appellant: Mr. Krishnendu Datta, Sr. Advocate along with Ms. Neha Agarwal & Mr. Nipun Gautam.

For Respondents: Mr. Udita Singh, for R-1. Mr. Abhishek Sharma, Mr. Kritya Sinha & Mr. Shawaiz Nisar, for R-2. Mr. Mithilesh Kumar Pandey, for R-3. JUDGEMENT

( 05.04.2024)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present Appeal i.e., Company Appeal (AT) (Insolvency) No. 1537 of

2023 has been filed by Mr. Vikram Laxman Pawar (in short the 'Appellant') who -2- Comp. App. (AT) (Ins.) No. 1537 of 2023

was workman employee with the Corporate Debtor since 30.09.2010 against the

Impugned Order dated 10.10.2023 passed by the National Company Law

Tribunal, Mumbai Bench, Court-V (in short 'Adjudicating Authority') in I.A.

No. 4455 of 2023 CP (IB)/1330 (MB) 2020. Mr. Sripatham Venkatasubramaniam

Ramkumar is the Resolution Professional of the Corporate Debtor i.e., Privilege

Industries Ltd. (in short 'Respondent').

2. It has been brought out that due to one alleged false criminal case, the

Appellant was arrested and was behind bars from 03.09.2015 to 16.12.2016 and

later he was acquitted by the Sessions Court at Satara vide an order dated

16.12.2016. The Appellant stated that in between the service of the Appellant

was terminated by the Corporate Debtor on 19.04.2016 which was challenged by

the Appellant before the Labour Court in 2018 and the Labour Court vide its order

dated 12.01.2023 reinstated the Appellant with back wages w.e.f. 16.04.2016 till

actual reinstatement.

3. It has been submitted that the Appellant informed the Corporate Debtor

vide letter dated 06.02.2023 regarding the Labour Court's order and in response

to the Corporate Debtor on 07.04.2023 asked the Appellant to join with immediate

effect, however, without back wages for which the Corporate Debtor

contemplated approaching the High Court.

4. It has brought out that the Corporate Debtor was admitted into CIRP by the

Adjudicating Authority vide its order dated 15.02.2023 and IRP issued form 'A' -3- Comp. App. (AT) (Ins.) No. 1537 of 2023

as public announcement on 22.02.2023 for seeking claims against the Corporate

Debtor.

5. It is the case of the Respondent that 90 days time limit from filing of the

claims in terms of Regulation 12 (2) of the CIRP Regulations, 2016 expired on

21.05.2023, whereas the Appellant filed the claim with the Respondent on

05.07.2023 and the Respondent rejected the claim of the Appellant vide letter

dated 18.07.2023 being delayed claims.

6. In due process, the SNJ Breweries Private Limited was considered as

Successful Resolution Applicant (in short 'SRA') and the Respondent filed I.A.

No. 4004 of 2023 (Plan approval application) before the Adjudicating Authority

on 30.08.2023.

7. It has been submitted that the Appellant filed an application before the

Adjudicating Authority for his claims which was dismissed by the Adjudicating

Authority vide its Impugned Order dated 10.10.2023 and subsequently the

Adjudicating Authority approved the Resolution Plan submitted by the SRA

based on I.A. No. 4004 of 2023 of the Respondent.

8. The Respondent submitted that as per the Regulation 12 of CIRP

Regulations, 2016 the claims are required to be filed within 90 days whereas the

Appellant filed his claims much later.

9. It is the case of the Appellant that even after the Corporate Debtor was

admitted under CIRP on 15.02.2023, the Corporate Debtor wrote a salary fixing -4- Comp. App. (AT) (Ins.) No. 1537 of 2023

letter dated 20.02.2023 to the Appellant and the Appellant again brought to the

notice of the Corporate Debtor vide his letter dated 10.05.2023 for his back wages

in terms of order of Labour Court Satara. However, the Appellant was advised to

file the claims before the Respondent as IRP vide letter 19.05.2023 and the

Appellant filed his claim in form 'D' on 05.07.2023 for an amount of Rs.

20,25,577/- which was rejected by the Respondent on the ground of delay on

18.07.2023.

10. It is the case of the Appellant that all this happened much prior to CoC

approving the Resolution Plan of SRA on 23.08.2023, whereas he has submitted

the claims much earlier and has taken up his case for back wages even earlier then

filing the claims with the Respondent.

11. The Appellant mentioned that his application No. 4455 of 2023 before the

Adjudicating Authority was dismissed on 10.10.2023 on the ground that the claim

has been filed by the Appellant beyond 90 days and the application for approving

the Resolution Plan of SRA was pending that the Adjudicating Authority at that

stage.

12. The only issue in the present appeal is whether the claims of the Appellant

could have been considered by the Resolution Professional and the Adjudicating

Authority despite being filed after 90 days in terms of Regulation 12 of CIRP

Regulations, 2016.

-5-

Comp. App. (AT) (Ins.) No. 1537 of 2023

13. We note that the case has chequered history whereby the Appellant was

allegedly falsely implicated in criminal case, arrested and subsequently

discharged from the charges after legal battle. The Appellant also got order in his

favour by the Labour Court, Satara for reinstatement with back wages and the

same was informed by the Corporate Debtor much before CIRP Process was

admitted by the Adjudicating Authority. It is the fact that the Corporate Debtor

in the meantime was admitted under CIRP, but even during this period of the

CIRP, the Corporate Debtor wrote letter to the Appellant for wage fixation as

noted earlier, which clearly implies that Corporate Debtor/ Respondent know very

well of the claims of the Appellant.

14. It is the also admitted fact that the Appellant filed his claim in Form 'D' on

05.07.2023 which was beyond stipulated period of filing the claims with the

Resolution Professional.

15. However, we note that the Respondent as Resolution Professional knew

about the claims of the Appellant and also knew about the Court orders in favour

of the Appellants for his reinstatement in the Corporate Debtor with back wages.

16. We also note that the CoC approved the Resolution Plan of SRA in August

2023 which was approved by the Adjudicating Authority on 23.12.2023, whereas

the claims of the Appellant were filed much earlier.

17. The Respondent has cited few judgements of Hon'ble Supreme Court of

India in case of CoC of Essar Steel India Limited Vs. Satish Kumar Gupta & -6- Comp. App. (AT) (Ins.) No. 1537 of 2023

Ors. [(2019) SCC Online SC 1478], Ghanshyam Mishra and Sons Private

Limited vs. Edelweiss Asset Reconstruction Company Limited [(2021) 9 SCC

657] and M/s RPS Infrastructure Ltd. vs. Mukul Kumar & Anr. [(2023) 10

SCC 718].

18. On the other hand, the Appellant brought out that he has taken up regularly

with the Corporate Debtor (prior to admission of CIRP) and later with the

Respondent regarding back wages and at one stage the Corporate Debtor

indicated that they are approaching the High Court regarding back wage as

indicated in their letter dated 07.02.2023 which was never challenged by the

Corporate Debtor before any High Court.

19. In this connection we take note of relevant background of M/s RPS

Infrastructure Ltd (Supra) which reads as under :-

"21.... We believe that the appellant ought to have been vigilant enough in the aforesaid circumstances to find out whether the Corporate Debtor was undergoing CIRP. The appellant has been deficient on this aspect. The result, of course, is that the appellant to an extent has been left high and dry.

22. Section 15 of the IBC and Regulation 6 of the IBBI Regulations mandate a public announcement of the CIRP through newspapers. This would constitute deemed knowledge on the appellant. In any case, their plea of not -7- Comp. App. (AT) (Ins.) No. 1537 of 2023

being aware of newspaper pronouncements is not one which should be available to a commercial party.

23. The mere fact that the Adjudicating Authority has yet not approved the plan does not imply that the plan can go back and forth, thereby making the CIRP an endless process. This would result in the reopening of the whole issue, particularly as there may be other similar persons who may jump onto the bandwagon. As described above, in Essar Steel, 8 the Court cautioned against allowing claims after the resolution plan has been accepted by the COC."

(Emphasis Supplied)

20. The Appellant submitted that he has filed his claim on 05.07.2023 again

the last date of filing on 21.05.2023 i.e., delay of 46 days. The Appellant also

submitted that list of Creditors was prepared by the Respondent on 13.07.2023,

whereas the claims of the Appellant was rejected on the grounds of delay on

18.07.2023.

21. Thus, we note that although there has been delay by the Appellant in filing

the claims, however, the Respondent prepared the list of Creditors after receiving

the claims with the Appellant and rejected the Appellants claims even later.

It establishes that the Respondent had complete knowledge about the

claims of the Appellant and exact amount therein even at the stage prior to

formation of list of Creditors.

-8-

Comp. App. (AT) (Ins.) No. 1537 of 2023

22. We also note that according to Regulation 12(2) of the CIRP Regulations,

2016 (prior to amendment carried out in 2023; the relevant regulation in the

present appeal) the Resolution Professional was mandated to accept the claim

only up to 90 days. Similarly, under Regulation 13 of the CIRP Regulations, 2016

obligated the Resolution Professional to decide the claims within 7 days of the

last date of receipt of such claims. We have seen earlier that the last date expired

on 21.05.2023 and therefore according to Regulation 13 of the CIRP Regulations,

2016 the list of Creditors should have been prepared by 28.05.2023 whereas we

note from the Reply Affidavit of the Respondent that final list of Creditor was

uploaded only on 13.07.2023, much after the stipulated period in the Regulations.

There was sufficient time available to the Respondent to consider the claims of

the Appellant but the Respondent did not do so despite the Respondent not

meeting the Regulation 13 of the CIRP Regulations, 2016 himself

23. From this it becomes very clear that at one side the Appellant did not meet

the requirement of filing of claims within 90 days under Regulation 12 of the

CIRP Regulations, 2016, on the other side the Respondent also did meet the

requirement of verifying claims within 7 days of the last date of receipt of the

claims as required by Regulation 13 of the CIRP Regulations, 2016 and thus the

plea of the Respondent regarding timelines is required to be taken with a pinch of

salt.

-9-

Comp. App. (AT) (Ins.) No. 1537 of 2023

24. We also note that the issue regarding delay claims has been commented by

this Tribunal and the following was recorded in our order sheet dated 13.12.2023

which reads as under :-

"Learned Counsel for the Appellant submits that the Appellant has filed its claim with delay on 05th July, 2023 and plan was approved by the Committee of Creditors in August, 2023 and the Judgment of the Hon'ble Supreme Court in the matter of M/s. RPS Infrastructure Vs. Mukul Kumar as referred to in the Order dated 30th November, 2023 is distinguishable since in the said cases claim was filed after approval of the plan by the CoC...."

25. It is reiterated that Appellant has been perusing for his claim from time to

time and has filed the claims much before the approval of Resolution Plan of the

SRA and much before the approval of Resolution Plan by the Adjudicating

Authority, whereas in the case of M/s RPS Infrastructure Ltd (Supra) the claims

were filed after the approval of Plan by the CoC, as such we hold that the M/s

RPS Infrastructure Ltd (Supra) is clearly distinguished based on the facts of the

cases.

26. The Appellant stated that the Resolution Plan size is approximately Rs. 380

Crores whereas the claims of the Appellant being worker, who has been fighting

legal battles, is of only Rs. 20 Lakhs. We also take into account that the Appellant

is only a workman empowered with limited resources, professional and legal -10- Comp. App. (AT) (Ins.) No. 1537 of 2023

background, unlike other Financial Creditors who are fully equipped to defend

their claims.

27. We also observe that it is the duty of the IRP under Section 18 of the

Insolvency & Bankruptcy Code, 2016 (in short 'Code') to collate of the claims

and since the Respondent had access to all the letters and claims filed by the

Appellant the Resolution Professional should have included the said claims of the

Appellant although it was beyond the stipulated 90 days but before his finalising

the list of Creditors and the Respondent should have put up for consideration of

the CoC. In any case, all these were much prior to consideration and approval of

Resolution Plan by CoC and final approval of Resolution Plan by the

Adjudicating Authority.

28. It may also be worth considering that although the timeline as stipulated in

the Code are sacrosanct and important and sometime critical for resolution of the

Corporate Debtor in order to achieve the maximization of value of all the

stakeholders, the timelines need to be considered as of directory nature and not as

mandatory in nature.

29. We hold that sufficient cause has been made out by the Appellant for

consideration of his claims and as such the appeal succeeds and the Impugned

Order dated 10.10.2023 rejecting I.A. No. 4455 of 2023 of the Appellant is set

aside.

-11-

Comp. App. (AT) (Ins.) No. 1537 of 2023

30. Both the parties are directed to appear before the Adjudicating Authority

on 15th April, 2024 who shall decide the same in accordance with law. No Costs.

Interlocutory Application(s), if any, are Closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical)

Sim