Case BriefsHigh Courts

Punjab and Haryana High Court: Anil Kshetarpal, J., expressed concern over lethargic attitude of the State towards granting pensionary benefits to the petitioner, the Court stated, “This court is sad to observe that the officials have lost all the compassion.”

 The petitioner lost her son on 26-11-2016, who, at the time of his death was working as Rural Medical Officer with the State of Punjab. The widow and children of the deceased shifted to Canada and they had already submitted an affidavit giving ‘No Objection’ to the authorities to release of pensionary benefits exclusively to the petitioner, who was mother of the deceased. The instant petition had been filed for issuance of a writ of mandamus to direct the official respondents to release pensionary and other service benefits exclusively to the petitioner. It was submitted that the amount of gratuity with regard to the deceased had also not been released.

Counsel for the respondent, Ambika Bedi, argued that the widow of the deceased was required to sign the necessary papers only then the pensionary and other pending benefits could be released, since the widow did not contact the respondent with necessary papers, the department did not release the amount. It was further pointed out by the respondent that approximately a sum of 3,08,000 rupees had been released to the petitioner towards arrears of medical reimbursement, salary, leave encashment and ex-gratia. Also, the process for releasing the payment on account of Contributory Provident Fund and Family Pension and whatever amount was legally due to the petitioner had already been initiated and the same would be completed within one month.

The Court directed the respondent to address the grievances of the petitioner expeditiously. While expressing concerns over unjustified delay in the grant of pensionary benefits to the petitioner the Court said, “It is unfortunate that the dependents/heirs of an Ex-employee, who died in harness, are being made to run from pillar to post. It is, thus, apparent that the State of Punjab has to put its house in order lest the Court compelled to take a serious view of the matter. It is hoped that this order would serve as a wake up call for the officers.” [Balbir Kaur v. State of Punjab, 2020 SCC OnLine P&H 2263, decided on 21-12-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Appellate Tribunal (NCLAT): Justice Bansi Lal Bhat (Judicial), V.P. Singh (Technical) and Shreesha Merla  (Technical) held that an ex-employee of the ‘Financial Creditor’ having rendered services in the past, should not be permitted to act as ‘Interim Resolution Professional’ at the instance of such ‘Financial Creditor’, regard being had to the nature of duties to be performed by the ‘Interim Resolution Professional’ and the ‘Resolution Professional’.

Background of the case:

The appellant- ‘State Bank of India’- is the ‘Financial Creditor’ has filed an appeal against the NCLT’s cognizance of the objection raised by the ‘Corporate Debtor’- ‘Metenere Limited’- regarding the proposed ‘Interim Resolution Professional’- Mr. Shailesh Verma whose employment under SBI for 39 years created an apprehension of bias, since Mr. Shailesh Verma was unlikely to act fairly and could not be expected to act as an Independent Umpire. The question that arose before the court was whether an ex-employee of one of the parties is qualified to act in the position of ‘Interim Resolution Professional’.

Decision

  • In the current appeal, the tribunal has laid emphasis on the current relationship between IRP and the Financial Creditor, where the former derives a pension from the latter. The Tribunal finds the IRP qualified to be an ‘Interim Resolution Professional’ in his personal capacity but the fact that the Appellant restricted its choice to propose him as IRP shows regard to past loyalty and the long services rendered by him. Further, the filing of instant appeal by ‘Financial Creditor’ shows their dismay at the IRP being asked to be substituted by the impugned order.
  • The relevant statutory provision which the bench looked into for qualification of the IRP is Regulation 3 (1) of the Insolvency and Bankruptcy Board of India,  Company Appeal (AT) (Insolvency) No. 76 of 2020 (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which reads as under: “(1) An insolvency professional shall be eligible to be appointed as a resolution professional for a corporate insolvency resolution process of a corporate debtor if he, and all partners and directors of the insolvency professional entity of which he is a partner or director, are independent of the corporate debtor.”
  • The likelihood of bias has been measured via the case of Ranjit Thakur v. Union of India, (1987) 4 SCC 611, in which the Supreme court said: “As to the tests of the likelihood of bias what is relevant is the reasonableness of the apprehension in that regard in the mind of the party. The proper approach for the judge is not to look at his own mind and ask himself, however, honestly, “Am I Biased?”; but to look at the mind of the party before him”. The committee finally upholds the impugned order, by saying the Appellant- ‘Financial Creditor’ should not have been aggrieved of the impugned order as the same did not cause any prejudice to it.

[SBI v. Metenere Ltd., Company Appeal (AT) (Insolvency) No. 76 of 2020, decided on 22-05-2020]