The NCLAT, Principal Bench New Delhi opined that when the Resolution Professional make the payments with the approval of the Committee of Creditors, then no personal liability can be fastened on the Resolution Professional.

Brief Facts:

Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor Jet Airways (India) Ltd. (“Jet Airways”) commenced. Operations of Jet Airways were stopped since April 2019. Claims were filed by the workmen, employees and other stake holders.

The 103 employees, who were part of Asset Preservation Team, insisted for some lumpsum payment for working in the Asset Preservation Team. Due to various uncertainties, certain lumpsum payment was made with the approval of Committee of Creditors (“CoC”) to 103 employees.

An application was filed seeking relief such as RP be made personally liable for any illegal payments made to employees. The said application was rejected. Hence, the present appeal.

Contentions of the Appellant:

It was contended that all employees and workmen are entitled for payment and giving lumpsum payment to 103 employees was arbitrary and unreasonable.

Observations of the Tribunal:

It was observed that as per the pleadings and facts, there was no occasion for holding RP personally liable for any payment made to 103 employees. It was pleaded by the RP that the payments, which have been made, were made with the approval of the CoC. Any payment after CIRP having been made by the RP with the approval of CoC, no personal liability can be fastened on the RP.

Further, the apprehension that Appellants’ 103 employees shall receive double payment has also been clarified and those 103 employees shall not be entitled to be made any payment as per the Resolution Plan towards their unpaid salary.

They shall only be entitled to gratuity and provident fund.

The decision of the Court:

Based on above findings, accordingly, the appeal was dismissed.

Case Title: Jet Aircraft Maintenance Engineers Welfare Association V.  Mr. Ashish Chhawchharia

Case No.: Company Appeal (AT) (Insolvency) No.1705 of 2023

Coram: Hon'ble Mr. Justice Ashok Bhushan, Mr. Barun Mitra (Technical Member)

Advocates for Appellant: Advs. Mr. Vikas Mehta, Ms. Anshula Grover, Mr. Mayan

Prasad, Mr. Kartik Pandey, Ms. Nitika Grover

Advocates for Respondent: Advs. Mr. Arun Kathpalia, Sr. Advocate with Mr. Raghav

Chadha, Mr. Dhiraj Kumar Totala, Mr. Nishant Upadhyay, Mr. Ankit Pal and Mr. Ajay Raj

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