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Trade Union can file insolvency plea as an operational creditor on behalf of its members: SC

May 2, 2019[2019] 105 taxmann.com 1 (SC)
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IBC : A registered trade union which is formed for purpose of regulating relations between workmen and their employer can maintain a petition as an operational creditor on behalf of its members

• NCLAT is not correct in stating that a trade union would not be an operational creditor as no services are rendered by trade union to corporate debtor. What is clear is that trade union represents its members who are workers, to whom dues may be owed by employer, which are certainly debts owed for services rendered by each individual workman, who are collectively represented by trade union. Equally, to state that for each workman there will be a separate cause of action, a separate claim, and a separate date of default would ignore the fact that a joint petition could be filed under Rule 6 read with Form 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, with authority from several workmen to one of them to file such petition on behalf of all.

• Hence, judgment of NCLAT is set aside and matter is remanded to NCLAT for adjudication afresh

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