Approval of RP with 100% voting and with slight modifications in amount to be paid to workmen was to be upheld: NCLAT

  • News|Blog|Insolvency and Bankruptcy Code|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 27 September, 2022

Approval of RP

Case Details: Nitin Gupta v. Applied Electro-Magnetics (P.) Ltd. - [2022] 137 441 (NCLAT-New Delhi)

Judiciary and Counsel Details

    • Justice Ashok Bhushan, Chairperson & Dr Alok Srivastava, Technical Member
    • RK Gupta, Adv. for the Appellant.
    • Abhishek AnandKunal GodhwaniSahil BhatiaV. SeshagiriManish KaushikAnubhav Gupta, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant was appointed as manager R&D (Railway projects) by the respondent – the corporate debtor. As the respondent didn’t pay his salary and other related amounts, the appellant sent a demand notice demanding debt due from the corporate debtor.

Thereafter, the appellant filed an application u/s 9 of the IBC as an operational creditor for initiation of the CIRP against the corporate debtor. CIRP was initiated against the corporate debtor and respondent no.- 2 was appointed as Resolution Professional (RP).

The Adjudicating Authority (NCLT) by the impugned order approved the resolution plan submitted by Resolution Professional. Thereafter, an appeal was made to the National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT.

The appellant submitted that under the resolution plan, workmen had not been paid their dues in accordance with the provisions of IBC but had been only allocated 15% out of 24 months dues of the period preceding to CIRP commencement. Further, the appellant claimed that the dues of employees of the past 12 months preceding the date of insolvency commencement had not been paid in full but only 10% of the amount admissible was paid to them.

It was found that a successful resolution plan had been considered by CoC and approved by a majority of 100% of members’ voting share in CoC according to provisions of section 30(4) of the IBC.


The NCLAT held that since the approved resolution plan complied with the provisions of IBC with slight modification in the amount proposed to be paid to workmen in relation to their dues including provident fund, approval of the resolution plan by the Adjudicating Authority was to be upheld with the said modifications.

List of Cases Reviewed

    • Order of (NCLT – New Delhi) in CA No. (371/C-II/ND/2018 in CP (IB) – 334/(ND)/2017, dated 2-4-2019 (para 30) affirmed.
    • H. Gangahanume Gowda v. Karnataka Agro Industries Corporation Ltd. [2003] 3 SCC 40 (para 20) distinguished.
    • Sikander Singh Jamuwal Resloution Professional v. Vinay Talwar [2022] 137 238 (NCLT – New Delhi) (para 30) followed.

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied