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Synopsis

The National Company Law Appellate Tribunal recently ruled that workers employed through a subcontractor cannot be treated as employees of the corporate debtor.

“In the present Appeal, the claim which was filed through sub-contractor cannot be treated as workmen of the Corporate Debtor. The Resolution Plan has dealt with claim as admitted by Resolution Professional and reflected in the Information Memorandum. The claim filed by the Operational Creditor in Form B has been dealt with in accordance with the IBC and CIRP Regulation and the claim which was filed by the Operational Creditor cannot be transposed to be claim of workmen for the purpose of this Appeal,” the order reads.

A bench of the NCLAT, including Chairperson Ashok Bhushan, Technical Member Barun Mitra, and Technical Member Arun Baroka was hearing an appeal against the order of the NCLT Delhi approving the resolution plan of Ramkrishna Forgings Limited.

The appeal was filed by an unregistered union, which argued that they were engaged with the corporate debtor through a subcontractor, and their claim had been accepted only to the extent of 8%. In contrast, the workmen directly employed by the corporate debtor were proposed to receive 100% of their claim.

The counsel representing the union asserted that there is no distinction between workmen directly employed by the corporate debtor and workers engaged through a subcontractor. Both groups, performing the same duties, are entitled to the same emoluments.

The counsel representing the resolution professional argued that the union has no right to challenge the approval of the plan since they were not even stakeholders in the Corporate Insolvency Resolution Process (CIRP).

Additionally, the counsel submitted that the claims of the corporate debtor's workmen were filed and admitted by the resolution professional, while the claims of the subcontractors were filed by the subcontractors themselves as operational debt.

The bench stated that the union had filed their claim as operational debt and not as workmen. Therefore, they cannot argue at this stage that they are workmen and should be paid at par with the workmen of the Corporate Debtor.

Consequently, the bench proceeded to reject the appeal of the trade union.

Advocates Abhijit Sinha, Utkarsh Singh, Aditya Tripathi appeared for the appellant. 

Advocates Anuj Tiwari, Swankit Nanda, Aroshi Pal appeared for the RP.

Case title: Amit Kumar Pandey & Ors vs Pardeep Kumar Sethi, Resolution Professional