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HomeLaw firmsDeals and TransactionsVaish Associates Secures NCLAT Victory: Upholds Resolution Plan Amidst Trade Union Challenge

Vaish Associates Secures NCLAT Victory: Upholds Resolution Plan Amidst Trade Union Challenge

Vaish Associates Advocates represented a Successful Resolution Applicant before the NCLAT in an appeal filed by Trade Unions challenging the order of approval of Resolution Plan primarily on the ground that it does not specifically provide for payment of PF and Gratuity dues, as mandatorily required pursuant to the judgment of Jet Aircraft, 2022 SCC OnLine NCLAT 418

The Resolution Plan in question was approved by the CoC alongwith a Clarificatory Note which provided that any additional claim which may become payable to workmen/employees due to operation of law or by any order of any Court or Tribunal or for any other reason will be adjusted from the funds earmarked for financial creditors. The CoC objected to the enforcement of the clause by drawing similarities with the judgment of Jet Aircraft.

The NCLAT held that the clause appended in the clarificatory note, that formed integral part of the Resolution Plan, was couched in wide terms to cover the said liability, that the SRA could not be made to bear the additional liability that the same must be paid as per the clause in Clarificatory Note. The present case was distinguishable from the judgment of Jet Aircraft as no such clause existed in Jet. Further, the judgment in Jet did not deal with a situation involving inter se issue between the CoC and SRA.

Mr. Kaustubh Prakash and Ms. Supriya Majumdar, Principal Associates, Ms. Hita Sharma, Senior Associate, and Ms. Prachi Bhatia, Associate, represented the Successful Resolution Applicant before the NCLAT.

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