Whether Gratuity is payable when no Gratuity fund is created? – Rakesh Sharma Vs. Mr. Sumat Gupta, RP of M/s International Mega Food Park Ltd. – NCLT Chandigarh Bench
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. In this case, a reference is made to the decision of the Hon’ble Supreme Court in the case of Sunil Kumar Jain and others Vs. Sundaresh Bhatt and others (2022) ibclaw.in 23 SC holding that the Wages/Salaries of the Workmen/Employees for the period during CIRP can only be included in the CIRP costs if it is established that the IRP/Resolution Professional managed the operations of the Corporate Debtor as a going concern during the CIRP and that the concerned workmen/employees actually worked during the CIRP. The Resolution Professional is mandated to make provisions to meet such expenses under the code.
