Corporate Lawyer: Trade union can file the petition for workers under the Insolvency and Bankruptcy Code, 2016 before NCLT; SC.

Supreme Court of India

Justice RF Nariman

The Supreme Court has settled the legal position regarding the locus standi of the trade union to file the petition before the NCLT under the Insolvency and Bankruptcy Code 2016, prior to that the different high courts had different views on the said issue.

In the case titled as "JK Jute mill Mazdoor Morcha versus Juggilal", the SC has set aside the order of NCLAT and NCLT, and has held that the trade union is an operational creditor for the purpose of the Insolvency and Bankruptcy Code, 2016, and can well maintain the petition before the NCLT on behalf of the workmen under the said act.

The bench led by Justice RF Nariman in his distinguished style of writing has held, that the trade union is representing the workers only. It was held so as it would be difficult for each worker to file separate petition before the NCLT, and then, separately pay fees of Interim Resolution Process, Interim Resolution Professional and cost of appointing Valuer etc. It was further held that the procedure is only the handmaid of Justice; to advance the cause of Justice, and cannot be handicap in accessing the justice.