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Judgment
18.08.2026: This appeal has been preferred challenging an order dated 07.07.2020 in IA No. 325 of 2020 in IA No. 551 of 2019 in CP (IB) NO. 49/7/HDB/2017. Vide this application being IA No. 325 of 2020, certain ex-employees who had served the corporate debtor during the CIRP have demanded payment of salary post successful completion of the resolution process, in which the appellant herein has become the successful resolution applicant and the successor management of the corporate debtor.
Heard the learned counsel for the appellant. The 1st and 2nd respondents, who are the applicants in IA No. 325 of 2020, though have been served with notice, have not chosen to enter appearance.
The learned counsel for the appellant submitted that the plan of the appellant was approved by the Ld. Adjudicating Authority vide its order dated 21.01.2019. Thereafter, a few employees filed IA No. 551 of 2019 seeking payment of salaries post the successful completion of the insolvency resolution process of the corporate debtor. This included the 2nd respondent in this appeal, who is one of the applicants in IA No. 325 of 2020. While so, the present 1st and 2nd respondent in this appeal filed IA No. 325 of 2020 in IA No. 551 of 2019, and sought payment of all pending salary for the month of February, 2019, and one month salary for notice period, i.e., for the month of March, 2019, along with interest, by which date they both had resigned. Indeed, they also presented the case of 8 others without any due authorization, and this application came to be allowed vide the impugned order and it is challenged in the instant appeal. This appeal has been preferred by the appellant essentially on the ground that once the plan has been approved under Sec. 31 of the Code, the Ld. Adjudicating Authority becomes functus officio, vis-à-vis the issues that arise after the plan was approved, and therefore, the 1st and 2nd respondent have approached the wrong forum for their remedy. Secondly, they also do not have requisite authority to represent the interest of the other 8 employees as they have not produced any authorisation.
The Ld. Adjudicating Authority, however, has allowed this IA No. 325 of 2020, and its line of reasoning is captured in paragraph 8 of the impugned order, and it reads as under:
"The applicants, who resigned on 28.02.2019 from the Corporate Debtor-company with one month notice were the employees of the Corporate Debtor when new management was inducted in the Board of the Directors of the Corporate Debtor. Therefore, we are of the view that the successful Resolution Applicant cannot escape the responsibility by hiding behind, the wheel of the employee-employer dispute.
We, therefore, taking cue from the judgment of the Hon'ble Apex Court, viz. to protect the interests of all the stakeholders, which IA No.325 of 2020. Hari Prasad Vs. Maharashtra Seamless Ltd."
We are not able to subscribe to the line of reasoning adopted by the Ld. Adjudicating Authority, as we are convinced on the merit of the submissions made on behalf of the appellant. Once a CIRP is successfully resolved, the Ld. Tribunal becomes functus officio, vis-à-vis any matters that concern a company that are not subjected to the CIRP, and also those matters that fall outside the purview of the approved resolution plan and its implementation.
If the 1st and 2nd respondents are keen to pursue their claim for realising the salary that they believe they are entitled to, they are at liberty to approach such appropriate forum for the same.
Subject to the observation herein in the previous paragraph, this appeal is allowed and the order of the Ld. Adjudicating Authority dated 07.07.2020 in IA No. 325 of 2020 is set aside. No Cost.