{"id":364289,"date":"2025-10-17T18:30:14","date_gmt":"2025-10-17T13:00:14","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=364289"},"modified":"2025-10-24T14:54:05","modified_gmt":"2025-10-24T09:24:05","slug":"sc-issues-notice-appeal-layoff-during-insolvency-ibc-v-id-act","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/17\/sc-issues-notice-appeal-layoff-during-insolvency-ibc-v-id-act\/","title":{"rendered":"SC issues notice in appeal challenging lay-offs during insolvency: Key questions raised on IBC-ID Act Conflict"},"content":{"rendered":"
\n

Supreme Court:<\/span> The Division Bench of J.B. Pardiwala and K.V. Viswanathan, JJ., issued notice to the respondents, returnable in four weeks, in a civil appeal raising following two significant questions of law:<\/p>\n

    \n
  1. \n

    whether the Insolvency and Bankruptcy Code, 2016<\/a> (‘IBC’) overrides the provisions of the Industrial Disputes Act, 1947<\/a> (‘ID Act’).<\/p>\n<\/li>\n

  2. \n

    whether a Resolution Professional (‘RP’) could lawfully retrench employees under the guise of a lay-off during the corporate insolvency resolution process.<\/p>\n<\/li>\n<\/ol>\n

    The present appeal was preferred by United Machines Karamchari Sangh (‘Appellant’) challenging the order passed by National Company Law Appellate Tribunal (‘NCLAT’). By the said order, the NCLAT dismissed the appellant’s appeal and upheld the purported lay-off of workmen\/employees affected by the Resolution Professional (Respondent 1) during the corporate insolvency resolution process. The appellant contended that the so-called lay-off was, in effect, an illegal retrenchment disguised as a lay-off, and stood vitiated for being in violation of the mandatory safeguards and procedures laid down under the ID Act.<\/p>\n

    It was further submitted that the impugned judgment failed to consider several critical contentions raised by the appellant, including the procedural irregularities committed by the Resolution Professional and the non-compliance with statutory provisions governing retrenchment and lay-off under the ID Act.<\/p>\n

    [Unitech Machines Karamchari Sangh v. Vivek Raheja, 2025 SCC OnLine SC 2255<\/a>, decided on 16-10-2025<\/span>]<\/p>\n\n

    Advocates who appeared in this case:<\/p>\n

    For Appellants:<\/span> Mr. Swarnendu Chatterjee, AOR, Ms. Harshita Rawat, Adv., Mr. Ali Abbas Masoodi, Adv.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    The appeal challenges the NCLAT’s order upholding a purported lay-off by Resolution Professional, which the appellant claims was a disguised and unlawful retrenchment. The Court is set to examine whether IBC overrides ID Act provisions and whether such retrenchments can legally occur under the garb of lay-offs during insolvency proceedings.<\/p>\n","protected":false},"author":67512,"featured_media":364299,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[30361,49506,6121,8911,91070,22014,34025,33047,5363],"class_list":["post-364289","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-ibc","tag-id-act","tag-insolvency","tag-labour-law","tag-lay-off","tag-nclat","tag-resolution-professional","tag-retrenchment","tag-supreme-court"],"yoast_head":"\nSC issues notice in appeal on lay-offs during insolvency | SCC Times<\/title>\n<meta name=\"description\" content=\"Supreme Court issues notice in a civil appeal challenging NCLAT's order on alleged illegal lay-offs during insolvency proceedings. 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