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Judgment
PER SE : HON’BLE SH. H.P. CHATURVEDI, MEMBER(J)
The present application is filed under Regulation 31(3) of IBBI (Liquidation Process) Regulations, 2016 read with Section 36(4)(a)(iii) of the present IBC, whereby the Applicant/liquidator has sought a prayer for making suitable modification in its list of the stakeholders as mentioned in clause 10 of the present application inconformity with Regulation 31(3) of the IBC.
For the sake of convenience, the contention made by the applicant in the application may be summarized as under and by quoting the relevant paragraphs of the application :-
2.The Liquidator is managing the whole process of liquidation as per provisions of IBC in best spirit and manner.
3.Under regulation 31(2) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Regulations), the liquidator had already submitted the List of stakeholders on the basis of proofs of claims submitted and admitted to the Adjudicating Authority in the ongoing liquidation of the Corporate Debtor on 25.06.2019 i.e. within 45 days from the last date of receiving the claims. A copy of acknowledgment of filing such List of stakeholders with adjudicating authority is attached herewith as Annexure A.
4.The liquidator came across various additional information from stakeholders and other sources, which warrants a modification in the list of stakeholders already admitted and filed.
5.In accordance with regulation 31 (3) of Regulations, the liquidator is seeking approval of this Hon'ble Tribunal for submitting the modified list of stakeholders on the basis of additional information received, new claims received and various other reasons as listed out in this application before Adjudicating Authority in the ongoing liquidation of the Corporate Debtor.
7.Various orders of adjudicating authorities, which demands and warrant the liquidator to modify the List of stakeholders:
i)Section 36 (4)(a)(iii) of the IBC which clarifies that all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation.
ii) Further various adjudicating authorities has also ruled out that dues of workman or employee towards provident fund, pension and gratuity do not form part of liquidation estate of corporate debtor and cannot be included in the assets to be liquidated for settling claims of creditors as per Section 53 of IBC and such dues will not be part of waterfall mechanism provided u/s 53 of the code and should be priorities. Accordingly, the liquidator has segregated the dues towards provident fund and gratuity fund as per books of accounts of Corporate Debtor and will be distributed among eligible workmen and employees.
v)This is to state that many claimants/creditors have also filed application against the company/liquidator for non- acceptance of claim filed after due date i.e. 11.05.2018. Further this Hon'ble Tribunal was pleased to pass orders in favour of such claimants and had condoned the delay and accepted the applications filed by them. In the following cases, the Hon'ble Tribunal has directed the liquidator to consider the claim of the applicant on merits even if filed after the due dates:
a)M/s Das Motors Scooters v Arun Gupta (Liquidator For LML Ltd) CA No.135/2019, Appeal No.137/2019 in CP No.(IB)55/ALD/2017 vide its order dated 04.06.2019
b)M/s Auto World v Arun Gupta (Liquidator For LML Ltd) CA No.134/2019, Appeal No.136/2019 in CP No.(IB)55/ALD/2017 vide its order dated 28.05.2019
c)Lease plan India Pvt Ltd v Arun Gupta (Liquidator for LML Ltd) CP No.(IB)55/ALD/2017, CA No.253/2018 vide its order dated 09.04.2019
d)M/s Mittal Automobiles Company v Arun Gupta (Liquidator for LML Ltd) Appeal No.44/2019, CA No.45/2019 in CP No.(IB)55/ALD/2017 vide its order dated 07.03.2019
e)Auto Mark v Arun Gupta (Liquidator for LML Ltd) Appeal No.42/2019, CA No.43/2019 in CP No.(IB)55/ALD/2017 vide its order dated 07.03.2019
f)M/s Engineer's Auto Service Center v Arun Gupta (Liquidator for LML Ltd) Appeal no. 40/2019, CA No. 41/2019 in CP No.(IB)55/ALD/2017 vide its order dated 07.03.2019
g)M/s Gauri Components Pvt. Ltd. v Arun Gupta (Liquidator of LML Limited) CP No. (IB) 55/ALD/2017, CA No. 194/2018 vide its order dated 07.02.2019.
8.In compliance of provisions of sec 36 (4)(a)(iii) of the IBC and orders of adjudicating authorities and based upon various other reasons as stated, there is a requirement to modify the list of stakeholders already filed before this Hon'ble Tribunal.
9.Specific modifications in the list of different type of stakeholders:
i)There are modifications in the list of 2203 (Two Thousand Two hundred three) workmen, and such modifications are either in the amount of claim received or admitted or particulars of workmen. The modifications are proposed for the following reasons:
a)Updation of books of accounts of Corporate Debtor;
b)Receipt of additional documents/ information;
c)New Claims have been received;
d)Some typo errors in preparation of earlier list of workmen;
e)Segregating the amount of gratuity already admitted as part of workmen dues and shown separately.
ii) There are modifications in the list of 214 (Two Hundred Fourteen) employees, and such modifications are either in the amount of claim received or admitted or particulars of employees. The modifications are proposed for the following reasons:
a)Updation of books of accounts of Corporate Debtor;
b)Receipt of additional documents/ information;
c)New Claims have been received;
d)Some typo errors in preparation of earlier list of employees;
e)Segregating the amount of gratuity already admitted as part of employees dues and shown separately.
iii) There are modifications in the list of 54 (Fifty Four) operational creditors other than employees and workmen, and such modifications is either in the amount of claim received or admitted or particulars of operational creditor. The modifications are proposed for the following reasons:
a)Updation of books of accounts of Corporate Debtor;
b)Receipt of additional documents/ information.
c)New Claims have been received.
10.A modified list of relevant stakeholders has been prepared (only cases where some modification done, or new claims received), on the basis of proofs of claims submitted before the liquidator and other above-mentioned reasons under the liquidation process of Corporate Debtor is being submitted herein-under and annexed to this application:
Annexure E: List of cases where Modification is done in claim received and admitted for Workmen Annexure F: List of cases where Modification is done in claim received and admitted for Employees Annexure G: List of cases where Modification is done in claim received and admitted for Operation Creditors (Other than employees and workmen)
11.Further this is to state that there is no other modification in the List of Stakeholder proposed as of now except as stated in clause 10. All claims of other stakeholders already admitted and submitted before this Hon'ble Tribunal on 25.06.2018 shall not be affected due to such modification.
12.The proposed modification will not be prejudicial to interest of any stakeholders including workmen and employees. This proposed modification is in compliance of provisions of IBC and Regulations and with an objective to protect the interest of all stakeholders including employees and workmen.
For the aforesaid reason and grounds, the applicant has sought for further relief in its prayer clause, which is reproduced herein below :-
The modification of the List of Stakeholders as mentioned under Clause 10 of this application of relevant stakeholders be allowed/considered/approved in the process of liquidation of corporate debtor as per as Regulation 31(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
The learned applicant counsel alongwith PCS have pointed out that a list of relevant stakeholders has already been prepared except in those cases, where some modification is required considering the new claim received, proof of claims submitted belatedly before the Liquidator. Such claims received and admitted pertain to workmen, employees and other operational creditor. It is also be pointed out that this Bench also in certain matters has directed the applicant to consider the claim on its merits, which were submitted belatedly before it. Hence, there is need of modification.
The learned counsel drew our attention to Section 36(4)(a)(iii) of the IBC, which provide such certain items shall not be used for recovery and liquidation and shall not be included in the liquidation assets. The relevant provision of Section 36(4)(a)(iii), for the sake of convenience is being quoted herein below.
36.(4) The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation: -
(a)assets owned by a third party which are in possession of the corporate debtor, including-
(i)assets held in trust for any third party;
(ii)all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund;
(iv)other contractual arrangements which do not stipulate transfer of title but only use of the assets; and
(v)such other assets as may be notified by the Central Government in consultation with any financial sector regulator;
A perusal of the above stated provision specifically of Section 36(4)(a)(iii), makes it clear that sum dues to any workman or employee from the provident fund, pension fund, gratuity fund shall not form part of liquidation assets nor shall be used for recovery in the liquidation.
Having heard the submission of learned counsel and PCS by perusal of record of the present application, we find that the relief seeking for suitable modification of its stakeholder, appears to be reasonable and bonafide. In the light of the above discussion the present application deserves to be allowed. Hence, it is allowed in terms of its prayer clause as mentioned at page no.11 of the application, which is reproduced herein below :-
“The modification of the List of Stakeholders as mentioned under Clause 10 of this application of relevant stakeholders be allowed/considered/approved in the process of liquidation of corporate debtor as per as Regulation 31(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.”
With the aforesaid direction, the Liquidator is hereby directed to modify suitably and update the list of its stakeholder, and to keep continue with the liquidation proceedings in terms of the IBC. Such exercise needs be completed within 10 working days and be further submitted for necessary approval.
With the aforesaid observation, the CA No.176/2019 is allowed and accordingly disposed off.
List the matter on 29th July, 2019.