# In the matter of JVL Agro Industries Ltd. CA No. 294-2019 in CP No. (IB) 223-ALD-2018

> NCLT judgment dated 2020-12-10. Citation: TCN-2020-NCLT-00110. The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 10 Dec 2020
- **Citation:** TCN-2020-NCLT-00110
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jvl-agro-industries-ltd-ca-no-294-2019-in-cp-no-ib-223-ald-2018-a180209e

## Summary

### Background

The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, by the liquidator of JVL Agro Industries Ltd., seeking permission to make payments related to the gratuity policy of the Life Insurance Corporation of India (LIC). The Corporate Insolvency Resolution Process (CIRP) had commenced against JVL Agro Industries Ltd. on July 25, 2018, a moratorium was declared, and Supriyo Kumar Choudhury was appointed as the Resolution Professional. Subsequently, as no resolution plan was approved, the Adjudicating Authority ordered liquidation on August 19, 2020.

## Facts

The Corporate Insolvency Resolution Process (CIRP) commenced against JVL Agro Industries Ltd. on July 25, 2018. Supriyo Kumar Choudhury was appointed as the Resolution Professional. No resolution plan was approved by the Committee of Creditors (COC), leading to a liquidation order dated August 19, 2020. The corporate debtor had a gratuity policy with LIC covering only 92 employees since 2017. The annual gratuity contribution was paid until September 2019 during the CIRP. The next renewal contribution was due on September 4, 2020, but it was not paid. Approximately 403 employees were not covered by the existing gratuity policy, and some employees superannuated or resigned after the CIRP's start. The liquidator made a public announcement on August 24, 2020, inviting

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## Issues and analysis

### Issue 1: Whether the gratuity amount due to employees forms part of the liquidation estate of the corporate …

**Ratio:** The judgment in "Alchemist Asset Reconstruction Company Limited Vs. Moser Baer India

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**Reasoning:** The Adjudicating Authority relied on the precedent set by "Alchemist Asset

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**Interpretation:** Section 36(4)(a)(m) of the Insolvency and Bankruptcy Code (IBC) defines the

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**Application:** Given that the gratuity amount due to employees does not form part of the

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** Supriyo Kumar…
- **Respondents:** JVL Agro Industrie…; Standard Chartered…

## Timeline

- **2018-07-25 — CIRP Commen…**: Corporate Insolvency Resolution Process (CIRP)…
- **2018-07-25 — Moratorium D…**: Moratorium was declared…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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