No Liability on RP for payments to employees responsible for preserving and managing operations of Jet Airways: NCLAT [Read Order]
The bench held that there is no basis for holding the Resolution Professional personally liable for any payments made to the 103 employees
NCLAT – NCLAT Delhi – Jet Airways – resolution Professional – Asset Preservation Team – Jet Airways operations management – taxscan
NCLAT – NCLAT Delhi – Jet Airways – resolution Professional – Asset Preservation Team – Jet Airways operations management – taxscan
The Delhi bench of the National Company Law Appellate Tribunal ( NCLAT ) held that there is no liability on Resolution Professional ( RP ) for the lump sum payments made to employees who were part of the Asset Preservation Team (APT) responsible for preserving and managing the operations of Jet Airways.
Th two-member bench comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) dismissed the appeal of the Jet Aircraft Maintenance Engineers Welfare Association, which sought payment for all workmen and employees of Jet Airways, against whom the Corporate Insolvency Resolution Process ( CIRP ) proceedings were initiated on June 20, 2019.
Corporate Insolvency Resolution Process ( CIRP ) proceedings were initiated against Jet Airways (India) Ltd. (Corporate Debtor). Subsequently, workmen, employees, and other stakeholders filed claims.
The Interim Resolution Professional (IRP) created an Asset Preservation Team to ensure compliance on behalf of the Corporate Debtor. This team included 103 employees who requested a lump sum payment for their work due to uncertainties. The Committee of Creditors (CoC) approved this payment, but the 103 employees later left the team.
The Resolution Professional (RP) published the third List of Creditors, which showed the claims of the 103 employees and several management personnel as NIL, even though their claims were included in the second list. The appellant sought to orders for the RP to state settlements with the 98 employees listed, explain the payments made, and clarify if claims would be settled during the CIRP.
The Appellant contended that these 103 employees were paid a lump sum payment by virtue of the Resolution Plan, therefore, all employees and workmen of Corporate Debtor are entitled to payment.
The NCLT Mumbai (Adjudicating Authority) rejected the Appellant's appeal holding it devoid of merit. The Appellant filed an appeal before the Appellate Tribunal.
The respondent mentioned that the 103 employees were paid a lump sum amount because they were identified as essential personnel needed to preserve the assets and manage the operations of Jet Airways during the Corporate Insolvency Resolution Process ( CIRP ).
The Appellate Tribunal held that the prayers made by the Appellant have been clearly and categorically explained in the reply affidavit of the Respondent filed in this appeal, as well as before the Adjudicating Authority.
The bench held that there is no basis for holding the Resolution Professional personally liable for any payments made to the 103 employees. The Appellate Tribunal dismissed the appeal and upheld the decision of the Adjudicating Authority.
To Read the full text of the Order CLICK HERE
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