# In the matter of Larsen and Toubro Limited

> NCLT judgment dated 2024-09-24. Citation: TCN-2024-NCLT-00562. This case involves an application filed by Manoj Seth, the Operational Creditor, against Larsen…

- **Court:** NCLT
- **Order date:** 24 Sept 2024
- **Citation:** TCN-2024-NCLT-00562
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/larsen-and-toubro-limited-6690160c

## Summary

### Background

This case involves an application filed by Manoj Seth, the Operational Creditor, against Larsen and Toubro Limited, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to unpaid salary and other dues. The Operational Creditor was employed by the Corporate Debtor as a Senior Manager (Mechanical) and later designated as the Project Manager for the Bharatpur-Gangapur-Hindaun Sewerage Project. Following incidents at the project site, the Operational Creditor was asked to resign, leading to disputes over employment dues. The Operational Creditor issued a statutory Demand Notice, which the Corporate Debtor replied to, denying any outstanding payments. The application was

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## Facts

Manoj Seth, the Operational Creditor, was employed by Larsen and Toubro Limited, the Corporate Debtor, as a Senior Manager (Mechanical) starting March 26, 2013. He was later appointed Project Manager for the Bharatpur-Gangapur-Hindaun Sewerage Project. In 2018, incidents at the project site led to injuries to workers, and the Operational Creditor was asked to resign. He sought relieving from his job from July 14, 2018, and settlement of his employment dues. A dispute arose regarding the payment of salary, ESOP Cash-Out-Allowance (ECAL), and Retention Pay. The Operational Creditor issued a Demand Notice on January 30, 2019, claiming Rs.7,04,508/-. The Corporate Debtor replied on February 23, 2019, denying any outstanding payments, citing that the Operational Creditor

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## Issues and analysis

### Issue 1: Whether there is an 'operational debt' exceeding the …

**Ratio:** Section 5(21) of the Code defines 'operational debt'. Section 4 of the Code specifies the

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**Reasoning:** The NCLT examined the employment contract and related documents to determine if the

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**Interpretation:** The term 'operational debt' is interpreted to include claims related to

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**Application:** The NCLT found that the claimed amount of employment dues fell within the

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Manoj…
- **Respondents:** Larsen & Toubro…

## Timeline

- **2013-03-26 — Employment C…**: Operational Creditor employed as Senior…
- **2017-01-01 — Project Manager…**: Operational Creditor appointed as Project Manager for Bharatpur-Gangapur-Hindaun Sewerage…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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