FIR against Resolution Professional Girish Juneja in Hindustan Glass case: How OpIndia had exposed malpractice in the longest running IBC case

On the 19th of October, Nashik Court ordered the MIDC Sinnar Police Station to lodge an FIR against Resolution Professional Girish Juneja in the Hindustan National Glass (HNG or HNGIL) case. His malpractice had led to a fire in the Nashik Plant on the December 29, 2023, endangering the sick company, the sanctity of the Insolvency process against it and the lives of the workers.

Joint Judicial Magistrate First Class (Jt. JMFC) K.S. Khandre of Sinnar Court said in his order of October 19 that the Hindustan National Gas & Industries Limited (HNGIL)’s RP, Girish Siriram Juneja was answerable not only to the company and the court, but also the public at large. The court said he was also responsible for ensuring the safety of the workers of the plant – endangered by the massive fire in 2023.

“While in charge, they committed dishonest misconduct, negligence, illegal and destruction of the company’s property and committed an act criminal in nature,” said Jt. JMFC Khandre, on the issue in which fortunately there were no human casualties of any kind.

Referring to a complaint by a senior employee of HNG, Manoj C. Wadhavane, the court also detailed the Maharashtra Pollution Control Board report of the Safety & Health Officer that showed a violation of the provisions of Maharashtra Factories Act and Maharashtra Factories Rules.

The court ordered a detailed police investigation in the case and directed for an FIR to be filed against Girish Juneja.

The court said that RP Girish Juneja is responsible not only to the company but the public at large and that the allegation is that while in-charge, he committed “dishonest misconduct, negligence, illegal and destruction of company property” and “committed acts criminal in nature”.

Saying this, the court observed that the offences alleged against RP Juneja are cognizable in nature and that upon perusal of the complaint, it is clear that the complainant is not in a position to collect evidence. Therefore, a detailed investigation is necessary in the case. The court also, however, observed that at this stage, the court is not going into the merits of the case.

What is the HNG Insolvency case

The case started in 2020 with the DBS Bank initiating insolvency proceedings against Hindustan National Glass & Industries Limited (HNG) in NCLT Kolkata. Insolvency was admitted in the year 2021. Hindustan National Glass & Industries Limited is an Indian container glassmaker based in Kolkata. The company is the largest and one of the oldest glass manufacturing companies in India. In the year 2022, the CoC (Committee of Creditors) appointed Girish Juneja as the Resolution Professional. 

After the issue of Expression of Interest, Juneja received 14 bids to acquire HNG. Once the RP received the applications, on the 24^th of May 2022, a Request for Resolution Plan was issued and eventually, only three firms expressed interest in purchasing HNG – AGI Greenpac (AGI), International Sugar Corporation (INSCO) and Nirma Chemical.

What follows is a long line of questionable conduct by RP Juneja, Edelweiss and its associate companies and the CoC, led by SBI, earning losses in the hundreds of crores since the IBC process began. The irregularities by the RP were noted by several legal luminaries as well. The list of questionable conduct included bending the rules to favour AGI over INSCO, bending the rules to gloss over the fact that the merger between AGI Greenpac and HNG would lead to a monopolistic market, indication that he was collaborating with Edelweiss and its allied companies to tilt the scale in AGI’s favour and more. Along with the RP, the conduct of the CCI (Competition Commission of India) has also been questioned.

The full explanation on the alleged misconduct of the RP, Edelweiss, CCI and more can be read here, here, here and here.

RP Girish Juneja, the Sinner plant and allegations of workers

Girish Juneja, as mentioned above, was the Resolution Professional in the HNG IBC process. According to the IBC process and the laws governing it, it is the responsibility of the resolution professional (RP) to: 

• Manage the affairs of the corporate debtor (CD) as a going concern during the corporate insolvency resolution process (CIRP),
• Appoint and convene meetings of the CoC, so that they may decide upon resolution plans, and 
• Collect, collate, and finally admit claims of all creditors, which must be examined for payment, in full or in part or not at all, by the resolution applicant and be finally negotiated by the Committee of Creditors (CoC). 

According to the facts of the case and the legal opinion of former judges, the RP seems to have erred in all of his listed responsibilities, causing a delay in the HNG IBC process – leading to a Rs 30 crore+ loss daily – a loss being suffered by public sector banks in the CoC – eventually affecting the public exchequer. 

Beyond the IBC process itself, the RP’s role in the Sinnar Plant fire of HNG has been specifically questioned, based on which, the court has now directed and FIR to be filed and investigation to be conducted. OpIndia had detailed the allegations against Juneja in its article on the 15th of July 2024.

To understand how the RP may have derelict his duties as far as maintaining HNG as a going concern, we need to analyze one of the criminal complaints filed by one of the supervisors employed at HNG’s Sinnar plant in Nashik, Maharashtra. The complaint makes some serious allegations against the RP. 

“In the aforementioned background, Mr. Girish Siriram Juneja, being the Resolution Professional and Mr. Ramchandra Parasram, Une, being the Sinnar plant head of the said Company, who are entrusted with and having dominion over the property of Hindustan National Glass &Industries Ltd., have dishonestly committed acts of misconduct, negligence misappropriations, dispossessions, destructions and criminal breach of trust, which have resulted huge loss to Hindustan National Glass & Industries Ltd. These acts have also posed serious risks to the lives of the 180 permanent employees and 600 workers of the said Company as well as to the people living in the vicinity and to the environment. The said dishonest and negligent acts of Mr. Girish Siriram Juneja and Mr. Ramchandra Parasram Une, are grave cognizable offences..”, the complaint said. 

On 29th December 2023, there was a massive fire at the Sinnar plant resulting in molten glass leaking from the furnace. The complaint essentially points out that the RP and the plant head colluded to endanger lives for personal benefit. 

Here are the allegations that the complaint makes: 

1. RP Juneja and Une were informed that the furnaces used in container glass production needed repair. Furnace No.12 at Sinnar Plant, which has been affected by fire was commissioned in 2012. Consequently, Furnace No.12 at the Sinnar plant of the Company had exceeded its lifespan by 10 years and the same was also overdue for repair. Despite receiving warnings from specialized agencies, the essential upkeep and repairs of the furnace were neglected for an extended period.
2. Molten Glass failed to flow into the designated tank during the leakage incident, which must be filled with water, but there, was no water in the designated tank to cool the leaked Molten Glass. This, the complaint says, was due to the negligence of the RP. 
3. The complaint says that despite showing capital expense for fire safety norms and the purchase of firefighting equipment, the plant was functioning without a fire NOC. The plant only had a provisional certificate. 
4. The disposal of hazardous waste generated during the production process was not carried out in compliance with regulations.
5. The complaint says that it was the negligence of RP Juneja and Une that led to the fire of 29^th December – resulting in a great risk to lives.
6. The complaint says that the fire could have spread to the explosive material storage area, leading to loss of lives. The current damage owing to the fire amounts to Rs 500 crores. 
7. The complaint says, “Mr. Juneja has not taken any steps to investigate the fire incident dated 29/12/2023 or to address the concerns raised by workers. Instead, his focus has solely been on pursuing insurance claims, which will benefit the resolution applicant. Mr. R.P. Une under instructions of Mr. Juneja has transferred the majority of the permanent employees to other plants of the Company which caused many employees to tender forced resignation, as, they were local residents, and canceled all contracts for the supply of labor, leading to loss of employment of all contract workmen”. 
8. The allegation is that despite HNG having a balance of Rs 300 crores, RP Juneja has refused to restart the functioning of the plant. 
9. The complaint says that the repair cost would be reimbursed by insurance, therefore, Juneja not utilizing the Rs 300 crores to restart the plant points to a conspiracy to shut down the functioning of the Sinnar plant, leading to loss of jobs and revenue for HNG. 
10. “Juneja has provided 100% advance payment to various Corporate Operational Creditors Mr. Juneja exhibited favoritism towards certain corporate customers by providing them with 100% advance payments and placing orders at higher rates compared to smaller and local suppliers/traders”, the complaint claims. 
11. It is further alleged that the RP has selected vendors showing favoritism, ignoring vendors who had quoted lower prices, pointing towards irregularities and personal gain. 
12. It is also alleged that RP terminated the contracts of the security company and gave it instead to his preferred company at a higher cost, gaining personally. 
13. The RP has refused to give increments to the staff. 

“Thus, Mr. Girish Siriram Juneja, being the Resolution Professional, and Mr. Ramchandra Parasram Une, being the Sinnar plant head of the said Company, who are entrusted with and having dominion over the property of Hindusthan National Glass & Industries Ltd., have dishonestly misused their position and have committed cognizable offenses of misconduct negligence, misappropriations, dispossessions and destructions which shows their negligent conduct concerning fire or combustible matter, explosive substance, machinery and pulling down buildings. Mr. Juneja and Mr. Une ‘have also committed a criminal breach of trust, and so, being the responsible employee of Hindusthan National Glass and Industries Ltd. in the post of Supervisor for the last 6 years, I am filing the present written Complaint against Mr. Girish Siriram Juneja, and Mr. Ramchandra ‘ Parasram Une”, the complaint concludes. 

Essentially, the complaint is alluding to the fact that RP Juneja is gaining personally and neglecting the needs of the HNG company itself, keeping it as a going concern and ensuring its adequate functioning. The complaint also alludes to the fact that the RP specifically wanted the Sinnar plant to not be functional again so that other plants could benefit instead. One has to wonder here if the complaint itself alludes to the fact that the RP may have been trying to increase the value of the Rishikesh Plant (which AGI wishes to divest) at the expense of the interest of the company HNG and minimizing the value of HNG itself in the process. 

It is pertinent to note that not just Wadhawe, but various stakeholders including a statutory authority have filed criminal complaints against those operating the Nashik plant, seeking a criminal investigation of the fire incident at the Sinnar Plant on 29.12.2023. 

In fact, K.T Zope (deputy director- of Maharashtra Industrial Safety Department) under Section 8(1) of the Factories Act, has submitted a report to the Chief Judicial Magistrate of Nashik. In the report by KT Zope, the negligence by the RP in the upkeep and maintenance of the Sinnar plant had been clearly pointed out. 

KT Zope, who is the Deputy Director of Maharashtra Industrial Safety Department categorically submitted to the Chief Judicial Magistrate of Nashik that during his inspection, he found firefighting equipment in scrap condition, and therefore he had concluded that the occupier of the factory had contravened the Maharashtra Factory Rules, 1963. He further said that the contravention was punishable under Section 92 of the Factories Act, 1948. 

With this finding by the Deputy Director of the Safety Department, it becomes evident that the fire incident at the Sinnar Nashik plant was not simply an accident but one that was a direct result of the negligence by the occupiers of the factory – in this case – Mukul Somany and Resolution professional Girish Juneja. 

While the finding of KT Zope indicts the negligence of the RP and the other occupier, based on the complaint by the Supervisor of the Sinnar Plant, certain questions are pertinent to ask. 

1. The Sinnar Plant being gutted in fire and not being restarted despite the RP having the resources to do so could potentially point towards collusion between the RP and AGI, as the letter accuses. Essentially, the non-functioning of the Sinnar Plant directly benefits AGI in two ways. Firstly, the business being conducted by the Sinnar Plant would go directly to AGI in the interim since AGI is the second largest glass manufacturer after HNG. Secondly, with one big plant non-functional, it also helps solve the AAEC (Monopoly) problem arising out of the combination of AGI and HNG. The negligence and actions of the RP are inexplicable and therefore, the complaint by the Supervisor alludes to a collusion between the RP and AGI. 
2. We established in the previous articles that private institutions like Ernst and Young have established a stranglehold on the RPs and the IBC process. With the allegations against the RP, what is the culpability of EY in the IBC process of HNG and the gutting of the Sinnar plant? EY was appointed as the advisor to the RP in this case – being the advisor, was EY in the know about the RPs alleged shenanigans in the Sinnar plant? 
3. There are grave allegations that the RP has been using the plant for personal financial gain and to benefit his preferred vendors. With such allegations, should it not then be incumbent upon the IBBI to remove Girish Juneja as the RP in the HNG case, investigate his role and the merits of the allegation, and appoint a different RP so the HNG resolution process is streamlined? 

Workers Union of HNG say plant workers are threatening suicide, demand FIR against RP Juneja, allege collusion between RP and AGI – Letter to Union Labour Minister

On the 9^th of July 2024, a letter was written to Dr Mansukh Mandaviya, Union Labour minister, by workers’ trade union Nala Sangam to bring to his attention the plight of workers stationed at the Puducherry plant and other plans of HNG “due to the arbitrary, illegal and negligent actions of the Resolution Professional (“RP”), Shri. Girish Sriram Juneja was appointed to conduct the Corporate Insolvency Resolution Process (“CIRP”) of HNGIL”. 

The letter says, “The conditions of workers at plants of HNGIL is unsettling and disturbing. The workers are fighting every day with the management i.e., RP as they have been denied basic necessities for survival. It is disheartening to see the inhumane conditions under which they work for long hours, knowing that RP and AGI have funds and resources at their end to suppress the voice of the workers and ultimately achieve their illicit goals”. 

The complaint states that Girish Juneja, in conspiracy with AGI, has deliberately not ensured the safety and security of the workers due to which, the workers are also threatening to commit suicide. The workers, most affected by the prolonged IBC process of HNG, have had to sell their personal belongings to sustain themselves because of the ‘illegal’ actions of the RP.

This letter by HNG Nala Sangam employees union directly alleges that the RP is in conspiracy with AGI. Following are the points raised by the workers’ union with regard to the collusion between the RP and AGI and the role of the RP: 

1. The letter says that “the present grave situation has arisen due to the RP’s misgovernance of the plants of HNGIL, one of which has already led to a serious fire incident (at Nashik) and other plants are also in risk of great danger”.
2. The workers are the most affected stakeholders from the prolonged litigation of HNGIL for which they have no resources and no funds. The RP has protracted these litigations only to benefit AGI. The workers are on the verge of selling everything they have for a fair chance to be heard before the Courts of Justice. 
3. The letter says that the RP, either through his inactions or by design, is seeking to help AGI Greenpac in overcoming and creating circumstances that would render the litigations pending before the Supreme Court and in the process is risking the lives of thousands of workmen of HNGIL.
4. There was enough material, in the knowledge of the RP that the furnaces of the HNGIL were in dilapidated condition and any such incident may occur at any time. However, the RP did not take any concrete steps to repair/rebuild the said furnaces risking the valuable lives of thousands of workers of HNGIL.
5. The workers of Sinnar Plant did complain and address the issue of the dilapidated furnaces directly to RP on several occasions. However, the RP ignored the same which resulted in the fire incident at the Sinnar Plant. 
6. The Sinnar plant was run without a valid NOC, despite having capital expenditure for installing firefighting equipment.
7. Following the Fire Incident at Sinnar Plant, highly skilled personnel crucial to the safety of the furnaces at Nashik are being coercively transferred to other units, while those refusing transfer orders are being pressured into resignation, exacerbating concerns regarding fair labor practices.
8. Workers of HNGIL have expressed concerns that similar incidents could potentially occur at the other plants of the NGIL, posing a significant risk to the lives and livelihoods of the workers. 
9. The malefice of the RP is evident from the fact that RP did not report the said fire and no investigation was conducted or ordered by him. It is evident that the RP was only interested in insurance claims which will ultimately benefit AGI Greenpac. Despite HNGIL having sufficient bank balance to repair the said plant, RP failed to do so as the cost of renovation plus loss of profit. The letter says this shows malafide intent of the RP. 
10. The employees at the plant are being constantly harassed by the RP, who is denying the employees their salary and other reasonable dues. It is also clear that the RP is not even fulfilling the basic requirements/needs of the employees and has created an unhealthy working environment due to which there are high attrition of employees.

Interestingly, the letter by the workers union categorically states what the potential intent of the RP could be, stating clearly the collusion between the RP and AGI. 

The letter says: 

The two main reasons behind RPs’ intentional interest in bringing down the plants of the HNGIL are:

1. To make AGIs’ non-compliant plan, CI compliant b burning down plants of HNGIL and reducing the total capacity of HNGIL;
2. By diverting al the customers of HNGIL to AGI and skilled workers to AGI; and
3. To misappropriate the insurance proceeds of the said fire incident for the benefit of AGI and the RP himself.

The workers union’s letter goes on to make certain demands, which include directing the IBBI to take action against RP Girish Juneja, conduct a proper investigation into the fire incident at Sinnar Plant where Nala Sangam is also heard, Direct State Labour Commissioner to look into the matter and submit a report to the concerned department of Labour Ministry, and most importantly, file an FIR against the RP. 

It is well-established law that during the process of insolvency, the RP is the ‘occupier’ of the Corporate Debtor’s factory as held by landmark judgment Subrata Monindranath Maity v. The State as well. 

In this landmark judgment, the Madras High Court has held that: (i) The protection to the resolution professional given under Section 233 of IBC is obviously only in respect of act done or intended to be done in good faith under the code. The failure or omission to provide safety measures in the factory cannot be stretched to inaction. (ii) The resolution professional is the occupier of the factory (as defined under Section 2(n) of the Factories Act, 1948) and he cannot abdicate his duties and responsibility of providing necessary safety measures in the factory as mandated in the Factories Act. (iii) The expression used in section 17 of the Code explicitly say that the resolution professional is the person who is vested with absolute control of the Corporate Debtor company. While so, for the violation or omission in the factory premises, Resolution Professional is responsible for the Proceedings if any, initiated against Resolution Professional under the Factories Act in his capacity as occupier. The said proceedings will not be covered under section 14 or 233 of the Code.

It is therefore evident that the RP was responsible for the upkeep of the Sinnar Plant and if the complaint by the employees, the report by the deputy director- of the Maharashtra Industrial Safety Department and the subsequent magistrate order is to be considered, the RP seems to be responsible for gross negligence.