Workers challenge NCLT order on Incab Industries Jamshedpur in NCLAT

Mail News Service

Jamshedpur: The workers of the closed Incab Company (Cable Company) have filed an appeal in the National Company Law Appellate Tribunal (NCLAT), New Delhi, challenging the January 8, 2025 order of the National Company Law Tribunal (NCLT). The workers, led by Bhagwati Singh, have termed the order unconstitutional and unjust, alleging that their valid claims were wrongfully dismissed.

In the appeal, Bhagwati Singh stated that NCLT rejected the legitimate claims of nearly 2,000 workers from Incab’s Jamshedpur plant without any valid reason. The tribunal dismissed allegations against former resolution professional Shashi Agarwal, citing that his removal rendered the charges meaningless. However, workers argue that NCLT failed to recognize their rightful claims while asking the new resolution professional, Pankaj Tibrewal, to ensure provident fund and gratuity arrangements in the resolution plan.

The workers’ appeal further contends that NCLT ignored crucial facts regarding Incab’s financial history. It has been accepted that Incab took loans from ICICI and Axis Bank in 1985 and 1988, but the company had ceased operations between 1993 and 1996, making the loans non-performing assets (NPAs) by 1992. According to the workers, these NPAs became time-barred after 1996, and Incab had no liability after that period. However, NCLT failed to declare these loans time-barred under Section 238A of the Insolvency and Bankruptcy Code and Article 137 of the Limitation Act.

Allegations of fake claims

The workers allege that NCLT overlooked fraudulent claims made by Kamala Mills Limited and Fasca Investment Private Limited, which claim to have acquired NPAs from ICICI Bank in February 2006. Similarly, NCLT also unexpectedly accepted the claim of Pegasus Reconstruction Private Limited, which asserts that ICICI Bank sold its NPAs to it on February 29, 2016. However, the workers argue that according to established legal principles, if no recovery process is initiated within three years, the loans automatically become time-barred, eliminating any liabilities.

The appeal also highlights discrepancies in Tropical Ventures’ claim, which states that ICICI, Axis, HSBC, and Citi Bank loans to Incab in 1998 were repaid by Universal Leader in 2000 and 2001, and later transferred to them in March 2007. The workers counter this claim, stating that there is no documented evidence of such loans, and even if they existed, they became time-barred by September 30, 2017.

Moreover, the Delhi High Court’s order on January 6, 2016, had determined that Incab’s total liability to banks and financial institutions was Rs 21.63 crore. Despite this, NCLT accepted exaggerated claims worth Rs 4,000 crore from companies like Kamala Mills, Pegasus, and Tropical Ventures. The appeal argues that NCLT was only required to determine whether the Rs 21.63 crore loan was still valid or time-barred by August 7, 2019, but it instead passed an unjustified ruling in favour of dubious claims.

Workers demand justice

The workers have also cited violations of the SARFAESI Act and RBI guidelines, which state that NPAs can only be sold to banks or RBI-registered asset reconstruction companies, not private entities. NCLT’s failure to uphold this law is a serious oversight, they argue.

Furthermore, the appeal raises concerns about the illegal approval of Vedanta’s resolution plan and the continuation of an illegitimate committee of creditors formed by Shashi Agarwal, in violation of NCLAT’s June 4, 2021, order. Additionally, no directive was issued to recover the Rs 500 crore allegedly misappropriated by Ramesh Ghamandiram Gowani from Incab.

Bhagwati Singh has entrusted advocate Akhilesh Srivastava to represent the workers in NCLAT. “This fight is a matter of life and death for 2,000 families. We will not allow unjust corporate takeovers or illegal land grabs by Tata,” Singh declared.

He further raised safety concerns about houses within the Incab colony, many of which are illegally occupied or rented out. “Like the Tayo Colony incident, there is a serious risk of collapse, endangering lives and property. We will raise this issue in NCLAT as well,” he added.

The workers remain determined to protect their rights and prevent the exploitation of Incab’s assets, as they continue their legal battle in NCLAT.