Adjudication Of Workmen’s Claims Against The Debtor Company Is A Substantive Matter And Drt Has Neither Competence Nor Machinery For That

A three judge bench of Hon’ble Supreme Court in Bank of Maharashtra Vs Pandurang Keshav Gorwardkar & Ors. {2013 STPL (Web) 402 SC; Civil Appeal No. 7045 of 2005 with Civil Appeal No. 7046 of 2005-Decided on 7-5-2013} held as follows.

 

“65. The question is whether Section 19(19) of the 1993 Act clothes DRT with jurisdiction to determine the workmen’s claims against the debtor company? We do not think so for reasons more than one.”

 

“66. In the first place, 1993 Act has not brought within its sweep, the adjudication of claims of persons other than banks and financial institutions. The adjudication of workmen’s claims against the debtor company is a substantive matter and DRT has neither competence nor machinery for that. Certain incidental and ancillary powers given to DRT do not encompass power to adjudicate upon or decide dues of the workmen of the debtor company.”

 

“67. Secondly, Section 19(19) of the 1993 Act is a provision of distribution mechanism and not an independent adjudicatory provision.”

“68. Thirdly, the expression, ‘the Tribunal may order the sale proceeds of such company to be distributed among its secured creditors in accordance with the provisions of Section 529A of the Companies Act’ occurring in Section 19(19) does not empower DRT to itself examine, determine and decide upon workmen’s claim under Section 529A.” (Emphasis supplied)

Thus, in May, 2013, Hon’ble Supreme Court held that the adjudication of workmen’s claims against the debtor company is a substantive matter and DRT has neither competence nor machinery for that. Certain incidental and ancillary powers given to DRT do not encompass power to adjudicate upon or decide dues of the workmen of the debtor company.

DRT Has No Jurisdiction

























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