Case Law Details
Small Industries Development Bank of India (SIDBI) Vs International Mega Food Park Limited (NCLT Chandigarh)
NCLAT Chandigarh held that as there was no gratuity fund created by the Corporate Debtor, the Resolution Professional direct to pay gratuity to employee. Additionally, the salary and leave encashment of employees during CIRP period falls within the definition of insolvency resolution process cost.
Facts- In the present application, the applicant is seeking direction against Resolution Professional to release the amount due towards Gratuity, Leave Encashment and salary during the CIRP of the corporate debtor as the same does not form part of the liquidation estate of the corporate debtor. In the present matter, this Adjudicating Authority has admitted the petition i.e. CP (IB) No.174/Chd/CHD/2018 and initiated Corporate Insolvency Resolution Process(CIRP) in respect of the corporate debtor vide order dated 28.02.2019.
Conclusion- We hold that in the instant matter, the Resolution Professional cannot be directed to make payment of gratuity to the applicant as there is no gratuity fund created by the corporate debtor. As regards the salary and leave encashment during the period of CIRP, the same pertains to the amounts payable to an employee for services rendered during the CIRP. In this connection, these expenses clearly fall within the definition of insolvency resolution process cost as defined in section 5(13)(c) of the IBC, 2016.
FULL TEXT OF THE NCLT CHANDIGARH JUDGMENT/ORDER
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