# In the matter of LML Limited Vs. State Of U.P. And 2 Others WRIT - C No. - 10015 of 2021

> HC judgment dated 2022-01-25. Citation: TCN-2022-HC-00064. The writ petition was filed by M/S Lml Limited, under liquidation, challenging an award by the…

- **Court:** HC
- **Order date:** 25 Jan 2022
- **Citation:** TCN-2022-HC-00064
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/lml-limited-vs-state-of-up-and-2-others-writ-c-no-10015-of-2021-e841fe19

## Summary

### Background

The writ petition was filed by M/S Lml Limited, under liquidation, challenging an award by the Industrial Tribunal. The company, a manufacturer of geared scooters, faced financial difficulties due to changing consumer preferences and filed a reference before the Board for Industrial and Financial Reconstruction (BIFR). Strikes and lockouts ensued, leading to a settlement in 2007. Subsequently, an industrial dispute was referred to the Industrial Tribunal regarding the legality of a lay-off implemented in 2007. A corporate insolvency resolution process (CIRP) was initiated against the company, and it was eventually ordered into liquidation by the NCLT after a resolution plan was rejected.

## Facts

M/S Lml Limited, a company engaged in manufacturing geared scooters, faced financial difficulties due to a shift in consumer preference towards motorcycles in the late 1990s. The company suffered substantial losses and underwent partial restructuring in 2005. Due to rapid erosion of net worth, a reference was filed before the Board for Industrial and Financial Reconstruction (BIFR). Workmen resorted to strikes and demonstrations, leading to a lockout in 2006. A settlement was reached in 2007 before the Additional Labour Commissioner, but a splinter group of workmen challenged it. The State Government referred an industrial dispute to the Industrial Tribunal regarding the legality of a lay-off implemented on April 15, 2007. A corporate insolvency resolution process

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## Issues and analysis

### Issue 1: Whether the lay-off done by the employers in the …

**Ratio:** The Industrial Tribunal has the authority to determine the validity of a lay-off based on

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**Reasoning:** The Industrial Tribunal found that the lay-off was unjustified and illegal because it was

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**Interpretation:** Section 2(n) of the U.P. Act specifies the conditions under which a lay-off can

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**Application:** The High Court upheld the Industrial Tribunal's finding that the lay-off was

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## Parties

- **Judges:** Jayant Ba…
- **Respondents:** M/s. L.M.L.…; State Of…
- **Advocates:** Shubham A…; Bushra M…

## Timeline

- **1985-01-01 — Sick Industrial Companies (Special Provisions)…**: Enactment of the Sick Industrial…
- **1990-01-01 — Company Suffer…**: Around the late 1990s, the Company suffered substantial losses due to a significant…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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