Insolvency cannot be initiated on the basis of unpaid LTC & Leave encashment dues: NCLAT

 841 total views

Insolvency cannot be initiated on the basis of unpaid LTC & Leave encashment dues: NCLAT

 

 

 

NCLAT judgement in Company Appeal (AT)(Insolvency) no. 934 / 2021 has made some important observations as to the scope of insolvency proceedings. It has held that the welfare claims such as Leave Encashment, superannuation dues are not operational debt for the purpose of initiation of Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor under Section 9 of the IB, 2016.

In this case, Appellant who was an ex-employee of the Corporate Debtor filed the appeal under Section 61 of the Code before NCLAT against the order dated 06.09.2021 passed by NCLT Mumbai wherein the Petition filed by the Appellant under Section 9 of the Code against the Corporate Debtor was dismissed.

The copy of the order is as under:

NCLAT-LTC

1 Comment

  1. June 10, 2022
    Dayananda Kamath K

    It is such splitting of amounts due by Judiciary and Eagal(sic) experts is one of the main reason for failure of insolvency law. They ignore the basic meaning of insolvency that is inablity to pay the amount due to the person to whome it is due. The purpose of insolvency law is not declaring any one insolvent. It was a deterent to any one who do not want to honour his commitment to the ditriment of others interest.

    Reply

Leave a Comment

Your email address will not be published.

the taxtalk

online portal for tax news, update, judgment, article, circular, income tax, gst, notification Simplifying the tax and tax laws is the main motto of the team tax talk, solving