# In the matter of Stesalit Limited vs. Union of India & Ors.

> HC judgment dated 2025-02-21. Citation: TCN-2025-HC-00043. The writ petition was filed against the order dated 11.11.2024 passed by the Assistant Labour…

- **Court:** HC
- **Order date:** 21 Feb 2025
- **Citation:** TCN-2025-HC-00043
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/stesalit-limited-vs-union-of-india-ors-aa012d01

## Summary

### Background

The writ petition was filed against the order dated 11.11.2024 passed by the Assistant Labour Commissioner (Central) & Controlling Authority, directing payment of gratuity under the Payment of Gratuity Act, 1972. The petitioner's case is that Respondent No. 4, an ex-employee, had joined as Manager, Technical Operations on 18.09.2002 and resigned on 03.12.2014. The respondent raised the issue of the writ petition's maintainability, arguing that the petitioner had a remedy before the Regional Labor Commissioner and was attempting to avoid depositing the award amount. The petitioner argued that the company was under Corporate Insolvency Resolution Proceedings (CIRP) and that the respondent had already filed a claim for gratuity during CIRP, which was considered and

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## Facts

M/s. Stesalit Limited filed a writ petition against the order of the Assistant Labour Commissioner (Central) & Controlling Authority, which directed the company to pay gratuity to Shri Arun Roy, an ex-employee. Shri Roy had worked as Manager, Technical Operations from 18.09.2002 until his resignation on 03.12.2014. The company argued that it was undergoing Corporate Insolvency Resolution Proceedings (CIRP) and that Shri Roy had already filed a claim for gratuity during CIRP, which was partially awarded under the approved Resolution Plan. The company contended that the IB Code overrides the Payment of Gratuity Act. Shri Roy, as Respondent No. 4, argued for the maintainability of the order for gratuity payment. The Assistant Labour Commissioner had directed the

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## Issues and analysis

### Issue 1: Whether the provisions of the Payment of Gratuity Act, 1972, or the Insolvency and Bankruptcy Code …

**Ratio:** Section 14 of the Payment of Gratuity Act, 1972, confers overriding authority, stating

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**Reasoning:** The court reasoned that the Payment of Gratuity Act has an overriding effect, and the IB

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**Interpretation:** The Payment of Gratuity Act is interpreted as a special legislation designed to

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**Application:** The ratio and reasoning apply to the specific facts of the case because the

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## Parties

- **Judges:** Shampa Dutt…
- **Respondents:** M/s. Stesalit…; Union of…
- **Other parties:** Kohi…

## Timeline

- **2024-11-11 — Order by Assistant…**: The Assistant Labour Commissioner (Central) & Controlling Authority passed an order…
- **2025-02-11 — Hearing Con…**: Hearing concluded on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 36 — Liquidation estate](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-36)

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