In the case at hand, the workmen's claims for wages and other ...

Former workers' claims for wages rejected due to lack of proof of employment on liquidation date.

Case Laws     IBC

November 26, 2024

In the case at hand, the workmen's claims for wages and other dues were rejected by the liquidator due to lack of evidence substantiating their employment on the date of commencement of liquidation proceedings. The corporate debtor had ceased operations in June 2010, and the appellants themselves admitted to working only until April 2012. Despite the alleged violation of the Industrial Disputes Act, 1947, regarding the factory closure, the NCLT and NCLAT held that the appropriate remedy was to approach the Industrial Court or Labour Court, rather than raising the issue during the liquidation process. The tribunals relied on a precedent case involving Era Labourer Union, where similar claims were rejected for lack of verification from the date of closure. The NCLAT affirmed the Adjudicating Authority's decision, stating that the liquidator did not err in rejecting the claims due to insufficient evidence of employment until the commencement of liquidation.

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