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Judgment
Heard Learned Counsel for the Appellant and Counsel for the Liquidator.
This Appeal has been filed by the Appellant against an order passed by the Adjudicating Authority dated 21.11.2023 by which IA No.1887 of 2022 filed by Bajju Pupala and 21 Ors. has been dismissed. In the present case, CIRP commenced vide order dated 20.06.2017 and thereafter liquidation order was passed by the Adjudicating Authority on 08.04.2021. The Liquidator has admitted the claim of the Appellants towards the payment of salary for 12 months prior to the commencement of the liquidation. Appellant filed an IA No. 1887 of 2022 claiming that their dues of salary be treated as CIRP costs which application has been rejected by the Adjudicating Authority. Adjudicating Authority in the impugned order has observed that the applicants have failed to bring on record any cogent evidence, except proof of payment of salary of CIRP period to then during CIRP period in lieu of their employment. The said finding of the Adjudicating Authority is returned in paragraph 4.4, which is as follows:-
“4.4. We find that the Liquidator has not disputed their employment, but what question is whether the employees have actually worked during that period. We find that the applicant have failed to bring on record any cogent evidence, except proof of payment of salary of CIRP period to them during CIRP period in lieu of their employment which is not disputed, to demonstrate that they actually worked to keep the Corporate Debtor as going concern. Accordingly, we do not find merit in the prayer of the Applicants that their dues of salary for the period from 1.4.2020 to 31.3.2021 be treated as CIRP costs payable in terms of section 53(1)(a) of the Code, and not in terms of Section 53(1)(c) of the Code as proposed by the Liquidator.”
Learned Counsel for the Appellants submits that there are ample evidences available with the Appellants to show that they were working during the CIRP period prior to commencement of the liquidation.
Learned Counsel for the Liquidator submits that the Appellants were not working and the work of the Corporate Debtor was mainly outsourced to carry out contracts given to the Corporate Debtor. It is submitted that one Composite Application was filed without details of evidence of each employees regarding their claims of working during the CIRP period, hence, Adjudicating Authority has rightly rejected the application.
Learned Counsel for the Appellant contends that the Appellants have ample evidence. He has referred to certain e-mails which were responded by some of the employees which indicate that they are working which submissions are refuted by Counsel for the Liquidator.
In facts of the present case when IA No.1887 of 2022 was filed by compositely for all 22 employees and there was no material available to proof that they were working, no error has been committed by the liquidator in accepting their claims as under Section 53(1)(c). We, thus, do not find any error in the order of the Adjudicating Authority rejecting the application. However, in view of the submission of the Appellant that there is ample evidence to proof their working. Liberty is given to the Appellants to submit their evidence of working of each employees separately before the liquidator and it shall open for the liquidator to take appropriate decision.
Subject to liberty as granted, this Appeal is dismissed.