# In the matter of Lanco Infratech Limited

> NCLT judgment dated 2024-03-11. Citation: TCN-2024-NCLT-02123. The Lanco Infratech Employees Welfare Association filed an application under Section 60(5) of…

- **Court:** NCLT
- **Order date:** 11 Mar 2024
- **Citation:** TCN-2024-NCLT-02123
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-infratech-limited-029c7075

## Summary

### Background

The Lanco Infratech Employees Welfare Association filed an application under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking a direction to the liquidator to admit the claims of its members, who are former employees of Lanco Infratech Limited. These claims relate to unpaid dues, including a 'retention allowance' promised by the erstwhile management to employees who continued providing services to Lanco until 2018. The liquidator rejected the claims, arguing that the retention allowance was not part of the employment contract and lacked proper authorization. The applicant argued that the MD had approved the retention allowance on an internal note.

## Facts

The Lanco Infratech Employees Welfare Association, representing approximately 212 former employees of Lanco Infratech Limited, filed an application seeking the admission of their claims for unpaid dues, including a 'retention allowance.' The employees claimed that the erstwhile management had promised this allowance to those who continued working for Lanco until 2018, even though their salaries were not paid for several months before and during the CIRP. The liquidator rejected these claims, arguing that the retention allowance was not part of the employment contract and lacked proper authorization. The applicant contended that the MD had approved the retention allowance on an internal note dated 18.05.2017, agreeing to a 7% retention allowance for employees continuing

…

## Issues and analysis

### Issue 1: Whether MD'S noting on an Internal Note, entitles the employees to receive Retention Allowance as …

**Ratio:** A mere intention to pay, as expressed in an internal note, does not constitute a binding

…

**Reasoning:** The court observed that the MD's notation was suggestive in nature but lacked the

…

**Interpretation:** The court interpreted the MD's internal note as an expression of intent rather

…

**Application:** The court applied the ratio to the specific facts by concluding that the MD's

…

## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** M/s. Lanco…
- **Respondents:** M/s. Lanco…; Savan God…
- **Advocates:** Sai Sanjay…; Ms.Rubaina S…

## Timeline

- **2017-05-18 — MD's Intern…**: MD of Lanco Infratech noted on an internal note to consider paying a retention allowance…
- **2017-06-01 — Unpaid Sa…**: Applicant sought direction to pay salaries of certain employees for the month of June…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-infratech-limited-029c7075