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Upholds of Patanjali Foods Despite IBC
The has dismissed a writ petition filed by (formerly ) challenging its addition as a party to a pending labour dispute. Justice Nandesh S. Deshpande held that the approval of a under the does not automatically bar , particularly when the affected employee was not informed about the plan.
The Dispute
The case originates from a complaint (ULP No. 54 of 2014) filed by Shivshankar Singh against the General Manager of , alleging . During the pendency of these proceedings, the took over the business. Singh then sought to implead Patanjali Foods as a party, arguing that the new management had stepped into the shoes of the erstwhile employer.
The allowed the application on , directing that Patanjali Foods be added as respondent No. 3. Patanjali Foods challenged this order before the , which dismissed its revision on , citing the available under .
The IBC Defence
Patanjali Foods argued that its , approved by the on , contained a bar under the IBC against any fresh claims or proceedings. It contended that the and had ignored this while allowing its . The company relied on a public notice issued under and the , claiming that all creditors and claimants were given an opportunity to come forward.
Court's Reasoning
Justice Deshpande found two critical factors weighing against the petitioner. First, the labour complaint was already pending when the was approved by the NCLT. Second, there was evidence that the concerned employee—Shivshankar Singh—was not informed about the or the opportunity to file his claim.
The court observed:
"Two factors are against the petitioner; firstly, the fact that the complaint before the
was pending when the
was approved by the NCLT; and secondly,
, the concerned employee i.e. respondent No.1, was not informed about the
. Moreover, the
and the
have not foreclosed the right of the petitioner. The petitioner can very well take such defences in the proceedings pending before the
."
The High Court also rejected Patanjali Foods' reliance on an earlier judgment of the in Writ Petition No. 11862 of 2025 , noting that the facts were entirely different. That case dealt with the entitlement of an employee to seek payment or other reliefs after the was approved—a stage that had not yet arisen in the present matter.
The Verdict
Dismissing the writ petition, the court discharged the rule with . The proceedings will now continue, with Patanjali Foods free to raise all available defences, including those based on the IBC .
This ruling underscores that employees involved in ongoing litigation cannot be automatically shut out by a , especially when they were not given proper notice. The decision reinforces the need for transparency and fairness in the insolvency process, ensuring that pending legal rights are not extinguished without due opportunity.
