Employees of corporate debtor not entitled to copy of resolution plan or any portion thereof: NCLT
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- Last Updated on 15 September, 2021
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Case details: National Aviators’ Guild (NAG) v. Ashish Chhawchharia - [2021] 130 taxmann.com 28 (NCLT - Mum.)
Judiciary and Counsel Details
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- V. Nallasenapathy, Technical Member and Janab Mohammed Ajmal, Judicial Member.
- Ms. Jane Cox and Ms. Subha Nivedha, Advs. for the Applicant.
- Gaurav Joshi, Sr. Adv. Rohan Rajadhyaksha, Dhirajkumar Totala, Ms. Neeraja Balakrishnan, Nishant Upadhyay and Hardik Jain, Advs. for the Respondent.
Facts of the Case
Pursuant to an admission of a petition under section 7, Corporate Insolvency Resolution Process (CIRP) against the corporate debtor had been initiated and Resolution Professional was appointed.
In the Committee of Creditors (CoC) meeting, the resolution plan was approved by 99.22% of votes. Meanwhile, applicants (a union representing pilots of corporate debtor (Jet airways) filed an interim application seeking direction to Resolution Professional to furnish each of entities/applicants a full copy of the entire resolution plan approved by CoC.
It was submitted by applicants that they being unaware of details of the resolution plan, needed to know what was provided thereunder for its members and employees. On the other hand, the Resolution Professional denied supplying the resolution plan stating that it was a confidential document containing sensitive information and could only be presented to CoC.
NCLT Held
The statutory mandate requires that resolution plan can only be presented to CoC for its approval and presented before Adjudicating Authority for its satisfaction in approving same; involvement of employees who essentially are operational creditors of the corporate debtor is limited to satisfaction of their claims and personal entitlements and they cannot be entitled to a copy of resolution plan or any portion thereof. As a result, the applicants were not entitled to any relief in the instant application.
List of Cases Referred to
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- K.I. Shephard v. Union of India [1987] 4 SCC 431 (para 9)
- H.L. Trehan v. Union of India [1989] 1 SCC 764 (para 9)
- Sahara India (Firm) v. CIT [2008] 169 Taxman 328/300 ITR 403 (SC) (para 9)
- Canara Bank v. V.K. Awasthy [2005] 6 SCC 321 (para 9)
- Olga Tellis v. Bombay Municipal Corporation [1985] 3 SCC 545 (para 10)
- State of Orissa v. Dr. Binapani Dei AIR 1967 SC 1269 (para 10) National Textile Workers Union v. P.R. Ramakrishan [1983] 1 SCC 228 (para 10)
- Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/143 SCL 625 (SC) (para 12)
- Anil N. Surwade v. Prashant Jain [C.P. (IB) No. 1799 of 2018, dated 28-9-2020] (para 12)
- Kotak Mahindra Bank Ltd. v. Parekh Aluminex Ltd. [2019] 102 taxmann.com 435/152 SCL 525 (NCLT – Mum.) (para 12)
- Roger Shashoua v. Mukesh Sharma [2017] 14 SCC 722 (para 12)
- Sub Inspector Rooplal v. Lt. Governor [2000] 1 SCC 644 (para 13)
- Swiss Ribbons (P.) Ltd. v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 (SC) (para 16).
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