Basavaiah Chikkanna & Anr. vs Indo Enviro Integrated Solutions Pvt. Ltd. & Ors.

Ashok Bhushan, J.

I.A. No.378/2024 has been filed by Mr. Basavaiah Chikkanna under Rule 11 & 31 of the NCLAT Rules, 2016, read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (for short the ‘Code’ or the ‘IBC’) in Comp. App. (AT) No.347/2018. Similarly, I.A. No.6109/2024 has been filed in Comp. App. (AT) No.346/2018 referring to Rule 11 & 31 of the NCLAT Rules, 2016 and as well as Section 60(5) of the IBC code.

Both the applications arise out of common facts and submissions, hence it shall be sufficient to refer to the facts in I.A.378/2024, for deciding both the applications:

Applicants in I.A.378/2024, claim to be ex-employees of its erstwhile IL&FS Environmental and Infrastructure Service Limited (formally known as IEISL, a group company of IL&FS).

The applicant claimed that there were services were discontinued in the year 2016 and June 2020.

The IEISL, which was the company under which applicants were working promised to settle, however, amounts of ₹33,62,511/- are still due to be payable towards post cut-off date with respect to Applicant No. 1 and dues of ₹5,51,254/- are due to be payable to Applicant No.2.

The facts indicate that the IEISL were the applicants were working was resolved under the resolution framework. NCLT Mumbai passed an order on 02.02.2021, under which the Respondent No.1 Indo Enviro Integrated Solutions Limited was declared as successful purchaser and by approval of the NCLT Mumbai dated 02.02.2021, erstwhile IEISL stood resolved and taken over by Indo Enviro Integrated Solutions Limited & Ors.

In I.A.378/2024, applicant has made following prayers:

In I.A.6109/2024, applicant Dr. D. Rajeev Joseph, who claimed to have been working upto 22.11.2019, tendered his resignation, being aggrieved that he has not been paid full and final settlement and the full amount having not been paid. Application I.A.6109/2022 was filed praying for following reliefs:

Notices were issued in both the applications. Reply has been filed on behalf of Respondent No. 1, the entity who has been declared successful entity of the resolution of IEISL.

It is pleaded in the reply that proceeding which has given right to the application of proceeding initiated the Union of India under Sections 241 & 242 of the Companies Act, 2013 (for short the ‘Act’) and the NCLT vide its order dated 02.02.2021 approved, the asset disinvestment process/sale whereby IEISL was transferred to EverEnviro Resource Management Private Limited, which is holding company of Respondent No.1. The name of erstwhile IEISL was changed into Indo Enviro Integrated Solutions Limited. It is pleaded that the entitlement of the applicant has already been satisfied and no dues are liable to be paid by Respondent No. 1.

We have heard learned counsel for the applicant as well as learned counsel for the Respondent No. 1.

Learned counsel for the applicant submits that claim of the applicant is based on AOP and confirmed ledger statements as received from IEISL and the applicant seek their employment dues in terms of the judgement 02.02.2021 passed by the NCLT Mumbai in C.P. 3638/MB/2018. It is submitted that application is fully maintainable under Section 60(5) of the IBC. It is submitted that applicant has not been paid their full amount, hence applicants haves prayed for direction to Respondent No.1 to pay the balance and due, which relate to the employment of the applicants. There have been unauthorised deductions from the payout to the applicants.

Learned counsel for the respondent refuting the submissions of the applicant submits that present application is not maintainable under Section 60(5) of the IBC before this Appellate Tribunal. Applicant if aggrieved were entitled to file the appropriate application before the NCLT Mumbai in C.P.3638/2018, wherein the order was passed by NCLT Mumbai dated 02.02.2021, approving the resolution of IEISL. Under the order of the NCLT 02.02.2021, the Respondent No. 1 has under the asset disinvestment process/sale has taken the entity IEISL after payment of consideration of ₹164 crore. IEISL does not exist anymore and no claim can be raised by the applicant from Respondent No. 1. After four years of the completion of sale of IEISL, these applications have been filed which need not be entertained. It is submitted that whatever dues the applicants were entitled have already been paid. There is misjoinder of persons and cause of action. No outstanding dues are payable to the applicant. Application deserves to be rejected.

We have considered the submissions of the counsel for the parties and perused the records.

The applicants who have filed applications were appointed in company, which were part of the IL&FS group and the applicant claimed that they were being paid by the IEISL. Under the order of this Tribunal passed in Comp. App. (AT) Nos. 346/2018 & 347/2018, resolution of IL&FS group companies commenced and under the resolution framework, the resolution required approval of the NCLT. After completing the process with regard to resolution process of IL&FS Environment Infrastructure and Services Limited and specified environment entity of the applicant group, approval was sought before the NCLT Mumbai and by order dated 02.02.2021, NCLT Mumbai has approved the resolution under which on payment of sale consideration the Indo Enviro Integrated Solutions Limited, Respondent No. 1 was permitted to acquire the 100% shareholding of the IL&FS Environment Infrastructure and Services Limited.

The grievance raised by the applicant in these applications is that they have not been paid the dues which were due on the parent employer. IL&FS Environment Infrastructure and Services Limited (IEISL) for which the application has been filed. One of the objections raised by the counsel for the respondent is that approval of resolution of the entity was passed on 02.02.2021 and the Respondent No. 1 after payment of consideration of Rs.164 crore was declared the new entity after payment of the purchase consideration, the Respondent No.1, H-1 bidder for IEISL and specified environmental entities has been approved. Applicant grievance is with regard to certain non-payment by their erstwhile employer. According to respondent, whatever dues were required to be paid to the applicants was paid and the claim of the applicant as raised in the application cannot be entertained before this appellate Tribunal. The grievance if any of the applicant arose out of the order dated 02.02.2021 passed by the NCLT Mumbai Bench, Court–I in CA 1163/2020 in C.P. 3368/MB/2018. The remedy, if any, available to the applicant was to file an appropriate application before the NCLT.

We find substance in the objection raised by the respondent. The entity under which the applicants are claiming their employment and their dues against erstwhile entity has been resolved with the approval of the NCLT by order dated 02.02.2021. The grievance, if any, shall arise out of the said order and appropriate remedy available to the applicant was to file application before the NCLT in the CA 1163/2020 in C.P. 3638/MB/2018. Section 60(5) which has been referred to by the applicant in the application could have been availed before the NCLT Mumbai, where the erstwhile entity in which the applicants were working has been resolved.

We thus are of the view that objections raised by the counsel for the respondents have substance. The above applications filed by the applicant need not be entertained by the Appellate Tribunal. Application are disposed of with liberty to the applicant to raise grievances, if any, in CA 1163/2020 in C.P. 3638/MB/2018. We make it clear that we have not entered into merits of the submissions raised by both the parties, and we are not expressing any opinion in this order. All submissions of the applicants and objections raised by the respondents to the applications are left open to be considered in accordance with law.

Both the applications stand disposed of accordingly.