Employees union drags news agency UNI to insolvency court
Employees of United News of India (UNI) has dragged the news agency to NCLT, which on 19 May admitted the insolvency petition filed by the United News of India Worker’s Union. The 64-year-old news agency defaulted on a payment of Rs 103 crore, which comprise over Rs 102 crore of employee dues.
UNI, which was incorporated in 1959 as a non-profit organisation, had subscribers like the Hindu, ToI, Amrit Bazar Patrika, Hindustan Times, etc. It started facing financial problems when some of its major subscribers stopped subscribing to its services.
However, a major bolt that hit the UNI was in 2020 when the government-owned Prasar Bharati stopped subscribing to its services. UNI used to bill Prasar Bharati Rs 57.5 lakh a month. Prasar Bharati withheld 25% of this amount from April 2016, and in October 2020, terminated the contract.
An arrear payment of Rs 7.81 crore is yet to be paid by Prasar Bharati to UNI. The Board of the news agency has been taking steps to recover the money.
All these events led to accumulation of over Rs 103 crore in liabilities, most of which is dues of employees. This forced the Employees of United News of India, an employee union, to move NCLT to recover the money.
The question whether a trade union can file insolvency petition under Section 9 of the IBC was posed to the NCLT.
To find the answer to the question, the tribunal relied on the Supreme Court order in 2019 in the case of JK Jute Mill Mazdoor Morcha vs. Juggilal Kamlapat Jute Mills Company Limited through its Director & Ors.
The NCLT concluded that a trade union is covered as ‘Any other entity established under a statute’ under Section 3(23) (g) to file an application under IBC 2016. It also concluded that a trade union can claim an operational debt by filing an Application under Section 9 of IBC, 2016.
The tribunal appointed Pooja Bahry as the Interim Resolution Professional (IRP) in the case, and directed the operational creditor (Employees of United News of India) to make a payment of Rs 5 lakh to the IRP.
Also see: US-based Vice Media files for bankruptcy
