Allowed

In the matter of Karthik Alloys Limited IA-1786(MB)-2022 in C.P.(IB)-2119(MB)-2019

NCLT3 Mar 2023

Case brief

AI extract

What is this about?

The NCLT Mumbai Bench allowed an application by employees seeking direction to include terminal benefits like PF, ESI, and Gratuity in the resolution plan. The Tribunal held these dues do not form part of the Corporate Debtor's liquidation estate following NCLAT and Supreme Court precedents.

What did the court decide?

Application allowed to include PF, ESI and Gratuity dues in the resolution plan

In the matter of Karthik Alloys Limited IA-1786(MB)-2022… — Insolvency and Bankruptcy | NCLT (2023)

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH : COURT-IV

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IA-1786(MB)/2022 in C.P.(IB)-2119(MB)/2019

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Under Section 60(5)(a) of the Insolvency and Bankruptcy Code, 2016.

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Application moved by : Ms. Rakhee Jotkar and Ors.

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...Applicants/ Employees of Karthik Alloys

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Vs.

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Mr. Anneel Saraogi

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...Resolution Professional

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In the matter of Vedanth.com Worldwide Limited ...Operational Creditor

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Vs.

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Karthik Alloys Limited

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...Corporate Debtor

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Order Pronounced on : 03.03.2023

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Coram :

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Hon’ble Shri Kishore Vemulapalli : Member (Judicial) Hon’ble Shri Prabhat Kumar : Member (Technical)

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH : C-IV

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IA-1786(MB)/2022 in CP(IB)-2119(MB)/2019

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Appearances: For the Applicant(s) : Mr. T.N. Chandrassekar, Advocates. For the Respondent : Mr. Ranit Basu, Advocate.

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O R D E R

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Per: Prabhat Kumar, Member (Technical)

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This Application has been filed by Rakhee Jotkar & Others (Employees of Karthik Alloys Ltd.) under Section 60(5)(a) of the Code against the Resolution Professional (RP) seeking direction to the RP and CoC to include Terminal benefits of the employees in the resolution plan. The Prospective Resolution Applicant and Financial Creditor i.e. State Bank of India has also been made party in this Application.

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We have perused the Application and find that the present application is in relation to inclusion of claim of PF, ESI and Gratuity due to the employees of the Corporate Debtor. This issue is covered by the Hon’ble NCLAT decision in the case of Jet Aircraft Maintenance Engineer’s Welfare Association (2022) ibclaw.in 861 , which has, subsequently, been upheld by the Hon’ble Supreme Court {(2023) ibclaw.in 12 SC }. Further this decision has been followed by Hon’ble NCLAT Chennai in the case of Ms. C.G. Vijay Laxmi Vs. Sri Kumar Rajan, RP Hindustan News Print Limited, (2023) ibclaw.in 123 NCLAT and the Hon’ble Tribunal has further held that in view of the decision in Jet

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH : C-IV

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IA-1786(MB)/2022 in CP(IB)-2119(MB)/2019

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Aircraft case (supra), the question whether there was fund maintained by the Corporate Debtor or not pales into insignificance.

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Following these decisions, we hold that the amount of PF, ESI and Gratuity due to the employees of the Corporate Debtor are to be considered for payment in full as these amounts do not form part of Corporate Debtor’s liquidation estate. This IA-1786/2022 is allowed and disposed of, accordingly.

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Sd/-

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Sd/-

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PRABHAT KUMAR MEMBER (TECHNICAL)

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KISHORE VEMULAPALLI MEMBER (JUDICIAL)

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03.03.2023 / pvs

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