# In the matter of Gujarat NRE Coke Limited (in liquidation) IA No.865/KB/2020 in CP (IB) No.182/KB/2017

> NCLT judgment dated 2021-05-03. Citation: TCN-2021-NCLT-02228. This case involves an application filed by the workers of the Dharwad Unit of Gujarat NRE Coke…

- **Court:** NCLT
- **Order date:** 3 May 2021
- **Citation:** TCN-2021-NCLT-02228
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gujarat-nre-coke-limited-in-liquidation-ia-no865kb2020-in-cp-ib-no182kb2017-0bc1fa36

## Summary

### Background

This case involves an application filed by the workers of the Dharwad Unit of Gujarat NRE Coke Limited, a company undergoing liquidation under the Insolvency and Bankruptcy Code, 2016. The workers sought several reliefs, including the disbursement of their dues, a restraint on the liquidator from closing the Dharwad plant, and an investigation into the liquidator's conduct. The company faced financial difficulties since 2012, leading to its insolvency and subsequent liquidation in January 2018. The liquidator, Sumit Binani, was appointed to dispose of the company as a going concern. An agreement was made with Jeju Metals Private Limited (JMPL) for processing coal at the Dharwad plant, but disputes arose regarding payments and the termination of this agreement.

## Facts

Gujarat NRE Coke Limited faced financial difficulties since 2012, leading to its insolvency. An application under Section 10 of the Insolvency and Bankruptcy Code (IBC) was admitted, and the company was sent into liquidation on January 11, 2018. Sumit Binani was appointed as the liquidator. The company's Dharwad plant had an agreement with Jeju Metals Private Limited (JMPL) for coal processing, with JMPL paying processing charges. Workers at the Dharwad plant continued to work for JMPL under this agreement. Disputes arose regarding the payment of workers' salaries, with the liquidator allegedly delaying or refusing payments. The liquidator terminated the agreement with JMPL on July 15, 2020, citing payment defaults and financial unviability. The workers filed a

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## Issues and analysis

### Issue 1: Whether the liquidator should be restrained from terminating the agreement between the Company and …

**Ratio:** A contractual agreement between two corporate entities should be treated as a contract

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**Reasoning:** The court reasoned that JMPL itself had not challenged the termination of the contract.

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**Interpretation:** The court interpreted that it is not within the Adjudicating Authority's

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**Application:** The court applied this principle to the specific facts, noting that JMPL had

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Basavaraj…
- **Respondents:** Gujarat NRE Coke…; Sumit B…

## Timeline

- **2018-01-11 — Liquidation…**: Gujarat NRE Coke Limited…
- **2019-09-27 — Agreement wi…**: Agreement between Gujarat NRE Coke Limited and Jeju Metals Private Limited (JMPL) for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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