Telaprolu Rajani, J. (Member (J))

1. This application is originally filed by one Mr. Ashok Mudgil and 16 employees of M/s. Kei-Rsos Maritime Limited, which is the Corporate Debtor, against the Resolution Professional (RP) of the Corporate Debtor with the following prayers i) to direct the RP to abide by the order passed by the Adjudicating Authority dated 24.09.2021 & 22.11.2021, to pay salaries of the employees, submit TDS to IT Department and issue Form-16 for the FY 2019-2020 as agreed earlier in terms of Employment Agreement. ii) The TDS details of the employees of the Corporate Debtor is not paid regularly, the RP has to pay the penalty and interest which will be imposed on the employees by the Income Tax Department for late submission of ITR for no fault of theirs, iii) The RP has failed to pay the November, 2021 salary of two employees Mr. Ali & Mr. Giri, which is contempt of Adjudicating Authority's Order dated 22.11.2021. iv) To direct the RP to pay the expenses incurred by the employees in the litigation which amounts to approximately Rs. 3,60,998/-. v) To Direct the RP to pay the company guest house rent & electricity bill, which is allotted to CEO as per his employment offer letter, vi) To direct the RP not to contravene with the provisions of the code and to follow the code of conduct while performing his duties, vii) To impose penalty on the RP for acting with malicious intent for other purpose than resolution of insolvency. But however, in the course of hearing the Application the salaries of all the other employees were paid except those of Mr. Ashok Mudgil and Mr. Sushil Kumar Vasishtha. The Application does not list the employees. It only says Mr. Ashok Mudgil and 16 other employees. However, since the Respondents did not raise any objection with regard to considering the prayer of Mr. Sushil Kumar Vasistha, the application with regard to Mr. Ashok Mudgil and Mr. Sushil Kumar Vasishtha shall be dealt with.

2. An amended application was filed adding the CEO of the new management of the CD as a Respondent, since it is taken over by the new management. The facts of the case as per the application are as follows:

a) This Tribunal, by virtue of the order dated 28.09.2019 admitted the application for CIRP filed by M/s. Docking and Engineering Co. (VP) Private Limited, Visakhapatnam.

b) The Employees salary as per the Employment Agreement were paid till November, 2021, but thereafter no salaries were paid. The RP failed to comply with the order passed by the Adjudicating Authority on 22.11.2021.

c) An amended Application was filed, adding the CEO of the Corporate Debtor as a party. The New Management has taken over from 03.01.2022. The Successful Resolution Applicant (SRA) is responsible for the salaries of the employees of the Corporate Debtor. The RP is making false statements that the New Management, along with RP, had negotiated with the Employees of the Corporate Debtor about their Employment Agreements through Video Conference.

d) The RP was appointed on 24.12.2019. In the last more than two years, he could not initiate any enquiry against any of the employees. Instead the employees filed three IAs against the RP for his wrongdoings in the Corporate Insolvency Resolution Process (CIRP). So forming the committee after Resolution Plan approval is another method opted by him to harass the employees and delay the salary payment.

e) The CEO was only a key managing person and was never defacto Board of the Company. The RP is making a false statement that the CEO has refused to handover the files and documents of the Corporate Debtor. After the appointment of RP, he immediately took over the control of the Corporate Debtor which means that RP had already taken over the documents, books of accounts etc., otherwise, he could not have completed the CIRP.

f) The auditors have taken plenty of documents from the Corporate Debtor's Kakinada Office. Mr. Ashok Mudgil has submitted his resignation with one month notice, with effect from 01.03.2022. The RP is making false statements about the leave to HR. The Corporate Debtor has records of the CEO's unclaimed leave on 31.03.2022. The CEO has claimed leave for his son's wedding from his accumulated leave and the same was approved by the RP.

g) The Counsel appearing for the RP submitted that an enquiry is being conducted against the CEO and that is why his salaries were withheld and against Mr. Sushil Kumar Vasishtha for loss of some documents. It is surprising to note that no show-cause notice was served. The Company asset details are in control of CFO and the CFO in his reply email for the CEO has confirmed that there is no piece of land in the books of accounts of the Corporate Debtor. The salaries are being withheld unjustly.

h) Ultimately in the amended application, the prayer is for the salaries of these two employees for the months of January, February & March, 2022 and TDS and the penalty and interest for late submission of ITR. The prayer for payment of rent and electricity bill for the Guest House is also made.

3. The Respondents filed counter contending that this Application is filed by forcefully making the employees to sign the affidavit. Subsequently, eight employees have withdrawn the application. Mr. Ashok Mudgil should be treated as a Director, since, he was running the affairs of the Corporate Debtor on the authority of the Power of Attorney issued by the erstwhile Board of Directors and cannot be considered as CEO or Employee of the Corporate Debtor. He kept increasing the salary during the few years before the commencement of the CIRP, when the revenue of the Corporate Debtor was going down. There were a lot of non-compliances by the Applicant before the initiation of the CIRP, like non-audit of books of account, non-filing of tax returns etc. The payment of salaries to all the employees were made till the month of December, 2021 i.e., till the RP was responsible for the payment of salaries. The salary was paid to all the Employees till the month of February, 2022 except for those withheld by the management. The Resolution Plan submitted by Divetech Marine Engineering Services Private Limited was approved by this Tribunal on 03.01.2022 and the new management is responsible for all the operational issues. According to the Resolution Plan, the Resolution Applicant has the exclusive right to retain, terminate the employees or negotiate their contract. The new management had several one to one, group meetings with the staff of the Corporate Debtor. During these meetings it has come to the knowledge of the management that there has been complete non-adherence to the rules of the Corporate Debtor by CEO and few others. There has been glaring dereliction of duties by these personnel. A committee was formed to enquire into these matters and to take appropriate action.

4. The RP was informed about the unauthorized leave taken by the Applicant. The only time he asked for leave was for his son's wedding, which was granted by the RP. Other than that, the Applicant used to remain absent from the office without any intimation. The new management has capped the remuneration to be paid to the top management @ Rs. 50,000/- per month. The arrears for the month of July and August, 2019 cannot be paid after approval of the Resolution Plan. Any dues prior to the CIRP period should have to be filed as claim with the Resolution Professional. The TDS for the year 2020-2021 is not payable as it relates to the period prior to the CIRP and the claim has to be filed with the Interim Resolution Professional (IRP).

5. The affidavit furnished by Mr. Manoharan, Proprietor of Dolphine Marine Services rendering security and maintenance services to the Corporate Debtor is filed. During his interaction with Mr. Manoharan he reminded the RP that he is also taking care of immovable properties of the Corporate Debtor which was shocking as there is no record of immovable property in the balance sheet and in the account books of the Corporate Debtor. During the discussion it was informed by Mr. Manoharan that the original land documents are with the CEO and that he had sent instructions through Mr. Siva Kumar to arrange to sell the property and remit the sale proceeds in cash and further the CEO has handed over the photocopies of the land documents during Mr. Manoharan's visit to Kakinada. There are no merits in the application hence, the application is liable to be dismissed.

6. A rejoinder is filed, reiterating the contents of the petition and refuting the contentions made in the counter.

Whatever is pleaded by the Applicant and the Respondent, the issue that remains before this Tribunal is only with regard to the payment of salaries to these two employees i.e., Mr. Ashok Mudgil and Mr. Sushil Kumar Vasishtha for the months of January, February and March, 2022, the TDS on the said salaries and guest house rent.

7. The Counsel for the Respondent relies on two judgments rendered by the Supreme Court one Civil Appeal No. 5910/2019 between Sunil Kumar Jain and others Vs. Sundaresh Bhatt and others, wherein while allowing the appeal in part, the Supreme Court held that the wages/salaries of the workmen/employees of the Corporate Debtor for the period during CIRP can be included in the CIRP costs, provided it is established and proved that the Interim Resolution Professional(IRP) managed the operations of the corporate debtor as a going concern during the CIRP and that the concerned workmen/employees of the corporate debtor actually worked during the CIRP and in such an eventuality, the wages/salaries of those workmen/employees who actually worked during the CIRP period shall be paid treating it and/or considering it as part of CIRP costs and the same shall be payable in full first as per Section 53(1)(a) of the IB Code. The other judgment is reported in (2021) 9 SCC 657 [LQ/SC/2021/2115 ;] between Ghanashyam Mishra And Sons Private Limited through the Authorized Signatory Vs. Edelweiss Asset Reconstruction Company Limited through the Director and Others, wherein it was held that once a Resolution Plan is duly approved by the Adjudicating Authority under Sub-Section (1) of Section 31 of IBC, the claims as provided in the Resolution Plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of Resolution Plan by the adjudicating authority, all such claims, which are not a part of Resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the Resolution Plan.

8. The first decision will not apply to this case, since the salaries claimed in the amended application only pertain to the months of January, February & March, 2022 which are after the approval of the Resolution Plan. The Resolution Plan was approved on 03.01.2022. Hence it has to be now seen whether the new management would be responsible for payment of the salaries and whether this Tribunal has jurisdiction to direct the new management of the CD to pay the salaries.

9. With regard to the order dated 24.09.2021, it pertains to the period of CIRP. According to the submission made by the Applicant the Respondent did not honour the said order. But however the same was not agitated further. Since it pertains to the CIRP period, the new management cannot be directed to pay the salaries. Apart from that, the Respondent have filed a document showing that the salary for the month of December, 2021 is also received by the Applicant, which implies that salaries upto January, 2022 were paid. Moreover this application is only for the salaries allegedly due from the new management. Hence no order with regard to the said contention can be made.

Terms of employment were executed by the earlier management of the CD, with their employees. The Counsel for the Respondent submits that the terms of employment will not apply since the management, has after due discussions with the employees, passed a resolution in the board that the salary and other remuneration for all employees will not exceed Rs. 50,000/- per month. No evidence is placed on record that the employees were part of the said agreement and the agreement based on which the Board Resolution came to be passed is not also placed on record. The Board Resolution records that the copy of the forgoing resolution is certified to be true by signing a minimum of two directors of the Company. But there is no acknowledgment taken from the representative of the employees or any of the employees. The new management left with itself the option of retaining or terminating the employees who were working under the erstwhile management of the Corporate Debtor Company.

10. The employment letter in fact is only an offer letter and not the appointment letter as rightly contended by the Respondent's Counsel The said letter is also captioned as such. Moreover it is succeeded by the appointment letter. In the offer letter, no doubt, an offer was made to provide a company vehicle with a driver and permits guesthouse accommodation at Kakinada. But the same does not find place in the appointment letter.

11. The counsel for the Respondent also submits the lease agreement with the guesthouse owner is also terminated, hence a question of providing guesthouse to the Applicants does not arise. However, as far as Mr. Sushil Kumar Vasishtha is concerned his appointment letter is not filed, Mr. Ashok Mudgil submitted his resignation on 24.02.2022, asking the management to treat the letter as one month notice. He also mentioned that he looks forward to serve his notice period with effect from 01.03.2022. There is no evidence to show that the said resignation was accepted or as to when it was accepted. There is no evidence placed by Mr. Ashok Mudgil that he actually worked during the notice period and no evidence is placed with regard to the acceptance of the resignation.

12. The counsel for the Respondent submits that there are several allegations made against these two employees.

13. Certain emails are filed by Mr. Ashok Mudgil to show that he actually worked in the months of January & February 2022. There are certain letters which are served on Mr. Ashok Mudgil, on which it is endorsed that he refused to take those letters and did not handover the files to the new management.

14. So far as Mr. Sushil Kumar Vasishtha is concerned his services are terminated by virtue of the letter dated 09.03.2022. The argument of the Applicant's is that one month notice is required by either the employee or the management who seeks to terminate the services.

15. This Tribunal does not propose to go into the merits of the contentions made by either side. The admitted facts are that the new management has taken over the CD. The applicants remain to be the employees of the new management after the approval of the resolution plan. The claims against the earlier management cannot be made against the present management. The claims, if any, shall be made in the form of claims before the RP. No such claims are made. Once the Resolution plan is approved by the adjudicating authority, the adjudicating authority also ceases to have jurisdiction on the disputes raised against the new management. The applicants have to fight against the new management before appropriate forum, afresh, by filing appropriate application. The disputes against the new management cannot be raised in continuation of the insolvency petition filed and decided against the earlier management of the CD. The law is well settled that when once the Resolution plan is approved and new management takes control of the CD, no claims can be raised against the new management. This tribunal is not a forum for recovery. The application is not filed against the new management in the first instance. It is filed against the RP. The RP becomes functus officio after the approval of the Resolution plan. No order is made on the merits of the case as it would affect the decisions of the future litigation, if any, between the parties. It would suffice to say that this application is not maintainable in this petition. This Tribunal can deal only with insolvency issues and issues relating to the insolvency Resolution Process. This application does not relate to any of those. Once CIRP has come to an end, all the issues relating to the new management need to be raised against it alone, before the appropriate forum. The new management has agreed to pay Rs. 50000/- pm to the employees and the Counsel also submitted the same before this tribunal. The applicants were not willing to receive the same. For the aforementioned reasons, no direction can be given by this Tribunal to the new management. It is for the new management to consider the same. In the second cited judgment it is held that on the date of approval of Resolution Plan by the adjudicating authority, all such claims, which are not a part of Resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the Resolution Plan. The salaries claimed in this application are not part of the Resolution Plan, Hence the application is liable to be dismissed.

In the result, IA (IBC) No. 137/2021 in TCP (IB) No. 79/9/AMR/2019 is dismissed.