Orissa High Court

Bhushan Power & Steel Ltd vs Presiding Officer on 13 April, 2023

              IN THE HIGH COURT OF ORISSA AT CUTTACK
                                WP(C) NO.2405 OF 2022

            Bhushan Power & Steel Ltd.                   ....                Petitioner

                                                           Mr.N.K.Mishra,Sr.Adv.
                                                               Mr.A.Mishra,Adv.

                                           -versus-


            Presiding Officer, Labour Court,             ....            Opp.Parties
            BBSR and Another                                      Mr.S.B.Jena,Adv.


                      CORAM:
                      JUSTICE BISWANATH RATH
                      JUSTICE M.S.SAHOO
                                     ORDER

Order No.                           13.04.2023
    07.      1.     Heard learned counsel for the Parties.

2. This Writ Petition involves the following prayer:-

<Under these circumstances, the Petitioner Management humbly prays that this Hon9ble may be graciously pleased to admit this Writ Application, call for the records in I.D. Case No. 40/2019 from the Court of the learned Labour Court, Bhubaneswar i.e. the present Opp. Party No. 1, and issue notice to the Opp. Parties, more particularly Opp. Party No. 2 and after hearing the parties, allow this Writ Application by setting aside the impugned order dated 20.12.2021 passed by the OP No-1 in I.D. Case No. 40/2019, as at Annexure-1.

And further be pleased to direct the Opp. Party No. 1 to dispose off/drop the proceeding in ID Case No. 40 of 2019, as the same has become infractuous.

And may pass any such other or further order/order as this Hon9ble Court deems fit and proper in the facts and circumstances of the present case.

And for this act of kindness, the Petitioner Management as in duty bound shall ever pray.=

3. Claiming to have got the benefit out of the order passed by

the Principal Bench in C.A. No. 254 (PB) /2019 along with several

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other proceedings, it appears, the Petitioner-Company moved an

application vide Annexure-4 in the pending I.D. Case No. 40 of

2019 with the following relief:-

<Thus, by virtue of the NCLT Order, all litigation and violations against BPSL pertaining to any period prior to the Effective Date shall stand extinguished. Further, by virtue of the NCLT Order, all pending proceedings in relation to or in connection with BPSL will be deemed to have been withdrawn or dismissed or terminated, thereby all liabilities or obligations in relation thereto will be deemed to have been written off in full and permanently extinguished. As such the proceedings of the above referred case shall become infructuous by way of operation of IBC and the proceedings may be disposed of accordingly.=

4. Taking this Court through the order of the NCLT vide

Annexure-1, the issue framed therein and the direction part, an

attempt is made by Mr. Mishra, learned senior counsel that for the

relief granted by the NCLAT not challenged any further, the

Petitioner was in entitlement of the moving the application vide

Annexure-4. It is contended that the Labour Court in misreading of

the direction part by the NCLAT has come to reject the Petition at

Annexure-1 vide the impugned order dated 20.12.2021.

5. On realization that the NCLAT order/direction did not cover

the request involving Annexure-1, in the course of submission, Mr.

Mishra, learned senior counsel for the Petitioner acceding to the

impugned order herein makes an alternate prayer at least keeping

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the issue involved at Annexure-4 to be urged at the time of final

hearing.

6. Mr. Jena, learned counsel appearing for the Workman taking

this Court to the issue framed by the NCLAT in the order at

Annexure-2 as well as reading of the direction part opposed the

submission of Mr. Mishra, learned senior counsel for the Petitioner

on the footing that order vide Annexure-4 nowhere finds any

direction to take out the litigation pending before the Industrial

Forum and thus objected the prayer of Mr. Mishra, learned senior

counsel for the Petitioner.

7. Considering rival contentions of the Parties, this Court finds,

the NCLAT on the basis of application before it, the NCLAT has

come to observe the acceptance and approval of the resolution plan

subject to following:-

a) "The amount due to the operational creditors under the resolution plan must be paid in accordance with the amended Section 30(2) of the Code as the amendment expressly provides that it would be applicable to all applications pending for approval of the resolution plan like the one in hand.

b) C.A. No.327(PB)/2019 with a prayer for placing the settlement proposal dated 20.02.2019 before the CoC is hereby rejected.

c) CA No. 286(PB)/2019 filed by the erstwhile directors Mr. Sanjay Singhal and Mrs. Arati Sinnghal seeking copies of the resolution plan is dismissed with a cost of Rs.1/- lac to be paid personally by Mr. Sanjay Singal and Ms. Aarti Singal in equal share.

d) The resolution plan would be binding on the corporate debtor, its creditors, guarantors, members, employees and other stakeholders. The reduction of share

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capital of the corporate debtor as contemplated by the resolution plan would take effect without any further deed or act on the part of the corporate debtor and/or its constitutes.

e) We also approve the appointment of Monitoring Agency from the date of this order until the closing date. Accordingly, the CoC and the RP would continue as Monitoring Agency.

f)The power of the Board of Directors of the Corporate Debtor shall remain suspended until the closing date.

g) Various reliefs sought from the statutory authorities under the Income Tax Act, 1961, Ministry of Corporate Affairs, Department of Registration and Stamps, Reserve Bank of India and others are also disposed of. We do not feel persuaded to accept the prayer made in the resolution plan yet the resolution plan applicant may file appropriate applications before the competent authorities which would be considered in accordance with law because it would not be competent for the Adjudicating Authority-NCLT to enter into any such area for granting relaxation, concession or waiver which is wholly within the domain of competent authorities.

h) It is needless to clarify that Section 30(2) (f) of the Code mandates that the Resolution plan should not be against any provisions of the existing law. The resolution applicant, therefore, shall adhere to all the applicable laws for the time being in force.

i) The criminal proceedings initiated against the erstwhile Members of the Board of Directors and others shall not effect the JSW-H1 Resolution Plan Applicant or the implementation of the resolution plan by the Monitoring Agency comprising of CoC and RP. We leave it open to the Members of the CoC to file appropriate applications if criminal proceedings result in recovery of money which has been siphoned of or on account of tainted transactions or fabrication as contemplated under the various provisions of the Code or any other law. Those applications shall be considered in accordance with the prevalent law.

j) The RP is directed to redistribute the profits earned by running the Corporate Debtor during the Corporate Insolvency Resolution Process in accordance with the judgment of the Hon9ble NCLAT rendered in the case of Standard Chartered Bank v. Satish Kumar Gupta, R.P. of Essar Steel Ltd. & Ors., Company Appeal (AT) (Ins.) No.242 of 2019 decided on 04.07.2019 and the action to be taken by the RP is evident from the reading of para 211 of the said judgment.

k) The case in which the Adjudicating Authority or the Appellate Authority could not decide the claim on merit, all such Applicants may raise the issue before an appropriate forum in terms of Section 60(6) of the Code. The other 8Financial Creditors/ Operational Creditors9 would not be entitled any remedy under Section 60(6) of the Code.

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129. The sealed covers which have been furnished during the course of hearing shall be returned after re-sealing by the Bench Officer of the learned Counsel for the RP and acknowledgement of receipt may be obtained.=

8. The NCLAT framed the issues and the major relevant issue

required to be considered herein Paragrpah (v) at Page-162 reads as

follows:-

<All other issues of fact, law, priorites, all other applications before Adjudicating Authority etc arising out of or in relation to the insolvency Process of Corporate Debtor are left open for decision by the appropriate and competent Court of Law/Tribunal.=

9. This Court reading the acceptance and approval of the

resolution at the instance of the Petitioner nowhere finds, there is

any provision made for taking out the proceeding before Industrial

fora. In the circumstance, this Court finds, the Labour Court

justified in rejecting the application having no merit. It is at this

stage considering the further request of Mr. Mishra, learned senior

counsel for the Petitioner to provide an opportunity to the company

to raise this legal issue involved herein at the final hearing, this

Court observes, the question of taking out the proceeding before

the Labour Court since decided on merit, there is no scope left in

repetition of this attempt.

10. This Court declining to interfere with the order at Annexure-