# In the matter of Biotor Industries Ltd.

> NCLT judgment dated 2024-01-18. Citation: TCN-2024-NCLT-03003. This case involves an appeal filed by the Applicants, representing 271 workmen, against the…

- **Court:** NCLT
- **Order date:** 18 Jan 2024
- **Citation:** TCN-2024-NCLT-03003
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/biotor-industries-ltd-a32d537e

## Summary

### Background

This case involves an appeal filed by the Applicants, representing 271 workmen, against the rejection of their claims by the Resolution Professional/Liquidator of Biotor Industries Ltd. The applicants sought the admission of their claims, including salary, provident fund, and gratuity, which were rejected by the Liquidator based on the interpretation of the Insolvency and Bankruptcy Code (IBC) and the cessation of the Corporate Debtor's business operations since June 2010.

## Facts

Biotor Industries Ltd., the Corporate Debtor, ceased business operations in June 2010. The liquidation commencement date was 31.12.2018. The Applicants, representing 271 workmen, submitted claims to the Liquidator in Form F, seeking salary, provident fund, and gratuity. The Liquidator rejected these claims, citing that the IBC allows dues only for a period of two years/one year prior to the liquidation commencement date. The Liquidator requested proof of employment during the two years preceding the liquidation commencement date, but the Applicants did not provide sufficient evidence. The Applicants argued that the factory was never legally closed and that the workmen continued to report for work. The Respondent contended that the factories were closed since April 2010

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## Issues and analysis

### Issue 1: Whether the claims of the workmen are admissible under Section 42 of the Insolvency and Bankruptcy …

**Ratio:** The Insolvency and Bankruptcy Code (IBC) allows for the distribution of dues to workmen

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**Reasoning:** The court reasoned that the Liquidator was justified in rejecting the claims because the

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**Interpretation:** The IBC and related regulations are interpreted to mean that claims for dues

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**Application:** In this case, the Applicants failed to provide sufficient evidence to prove

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## Parties

- **Judges:** Shri. Kuldip…; Shri. Anil Raj…
- **Appellants:** Rakesh J.…
- **Respondents:** Biotor Industries…; Sanjay Kumar…

## Timeline

- **2010-06-01 — Corporate Debtor Ceases…**: Biotor Industries Ltd.…
- **2018-12-31 — Liquidation Commencement…**: Liquidation commencement…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 42 — Appeal against the decision of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-42)

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