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2026 Supreme(Online)(NCLT) 4598
IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH
Vinay Goel, J, Ravichandran Ramasamy, Technical Member
Devassykutty – Appellant
Versus
Kizhakkekara Kuriakose Jose – Respondent
IA(IBC)/122/KOB/2026|CP(IB)/29/KOB/2022
For the Appellants/Petitioners: M A Shaji
For the Respondents: Vinod P V
An application signed by one person without authorization for others is maintainable only for the signatory. Wages for services rendered during liquidation are treated as liquidation costs, but employment terminates upon the passing of the liquidation order.
Headnote:(A) Maintainability - Representative Capacity - An application filed in the names of multiple applicants but signed by only one without a power of attorney or specific authorization is not binding on the other applicants; however, the signatory remains competent to seek relief on their own behalf. (Para 16, 18)
(B) Liquidation Process - Wages and Salaries - Wages and salaries for services rendered by workmen during the liquidation period are treated as liquidation costs and are payable with priority under the waterfall mechanism. (Para 11, 21)
(C) Employment Status - Liquidation Order - Upon the passing of a liquidation order, the employment of all employees stands terminated; consequently, terminated employees cannot dictate terms for continuity of employment or seek to run the entity as a going concern if the assets are to be sold on a stand-alone basis. (Para 21, 22)
Issues: Whether an application signed by a single applicant on behalf of multiple applicants is maintainable and whether workmen are entitled to continuity of employment and priority payment of wages during liquidation.
| Table of Content |
|---|
| 1. workmen seeking priority payment of wages and statutory dues during liquidation. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. respondent's objection to maintainability and admission of liquidation costs. (Para 9 , 10 , 11 , 12) |
| 3. maintainability of application limited to the authorized signatory. (Para 13 , 14 , 15 , 16 , 17 , 18) |
| 4. verification of asset realization and distribution of wages. (Para 19 , 20) |
| 5. termination of employment upon liquidation order. (Para 21 , 22) |
| 6. final disposal of the interlocutory application. (Para 23 , 24 , 25 , 26) |
O R D E R
Per Coram
1. This Application has been filed under Section 60(5) of the IBC, 2016, read with Rule 11 of the NCLT Rules, 2016 , seeking directions for the protection of the workmen’s employment and statutory dues.
2. The present application has been filed in the names of 24 persons, shown as applicants against the Corporate Debtor, represented through the Liquidator, seeking certain reliefs detailed as under:
“a. Direct the Respondent-Liquidator to verify, admit and communicate to each of the Applicants the status and quantum of their claims submitted in Form D during CIRP and treat the same as claims in liquidation;
b. Direct the Respondent to pay wages and salary dues for the period during which the Corporate Debtor had run as a going concern during liquidation, treating the same as liquidation cost;
c. Declare and direct that amounts due towards provident fund, pension fund and gratuity fund of the workmen/employees shall not form part of the liquidation estate and shall be fully protected;
d. Direct the Respondent to make provision for payment of pending salary, wages, gratuity and PF dues of the Applicants before or at the time of completion of sale;
e. Direct that any sale of the Corporate Debtor as a going concern shall be subject to appropriate conditions safeguarding continuity of employment of existing workmen/employees, to the extent legally permissible;
f. Pass such other and further orders as this Hon'ble Tribunal may deem fit and proper in the interest of justice and protection of workmen.”
3. The applicants claim to be workmen/employees of the Corporate Debtor and submit that they have furnished and rendered their services during the CIRP period and subsequently during the liquidation period. However, they have not received their wages for such services. They have also pleaded that their gratuity and Provident Fund are required to be distributed. The workmen and their families are in dire financial crisis.
Brief Facts of the Case:
4. The Corporate Debtor, M/s. Vysali Pharmaceuticals was admitted into the Corporate Insolvency Resolution Process (CIRP) pursuant to an application filed by M/s. Kerala State Industrial Development Corporation under Section 7 of the IBC, 2016, numbered as CP(IB)/29/KOB/2022 before this Adjudicating Authority and the same was admitted vide order dated 13.10.2023, and the Interim Resolution Professional was appointed. Ultimately, due to non-approval of any feasible Resolution Plan, the Committee of Creditors (COC) decided to proceed with liquidation, and vide order dated 03.12.2024, this Adjudicating Authority passed a liquidation order and appointed Shri K. K. Jose as the Liquidator.
5. The Liquidator initially intended to sell the Corporate Debtor as a going concern and accordingly put the Corporate Debtor up for auction. However, despite several attempts, no bidder came forward to purchase it as a going concern. In the meantime, the IBBI notified an amendment to the IBBI (Liquidation Process) Regulations, 2016, which barred the sale of the Corporate Debtor as a going concern during the liquidation period. Accordingly, the Liquidator decided to sell the assets on a stand-alone basis. During the liquidation period, the workmen also requested the Liquidator to fulfil certain contractual obligations relating to their salary dues.
6. The applicants stated that, despite rendering servi
