# 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-02230. 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-02230
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gujarat-nre-coke-limited-in-liquidation-ia-no865kb2020-in-cp-ib-no182kb2017-f17de959

## 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 plant or terminating an agreement with Jeju Metals Private Limited (JMPL), 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 was directed to dispose of the company as a going concern, but this failed, leading to the sale of assets. The workers alleged that the liquidator's actions hindered their efforts to run the Dharwad

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## Facts

Gujarat NRE Coke Limited faced financial difficulties since 2012, leading to its insolvency and liquidation on 2018-01-11. The company's Dharwad plant had an agreement with Jeju Metals Private Limited (JMPL) for coal processing, generating revenue. Workers alleged the liquidator, Sumit Binani, hindered plant operations and terminated the JMPL agreement despite ongoing payments. Workers claimed the liquidator failed to pay their salaries from June 2020 onwards, despite receiving payments from JMPL. The liquidator argued JMPL defaulted on payments and the plant was unviable, with expenses exceeding revenue. The liquidator issued a 'no work no pay' notice on 2020-09-23. The workers also alleged the liquidator suppressed information about ongoing litigation and a Supreme

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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 such as the Corporate Debtor and

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**Reasoning:** The court reasoned that it is not for the Adjudicating Authority to step into the shoes

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**Interpretation:** The court interpreted that the termination of the contract was a commercial

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**Application:** The court applied this reasoning to the facts of the case, 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…**: The Company was sent into…
- **2019-09-27 — Agreement wi…**: Agreement between the company and Jeju Metals Private Limited (JMPL) was recorded in the…

## 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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