# In the matter of Unitech Machines Limited

> NCLT judgment dated 2023-10-06. Citation: TCN-2023-NCLT-01346. The case involves an application filed by Unitech Machines Karmchari Sangh, representing 92…

- **Court:** NCLT
- **Order date:** 6 Oct 2023
- **Citation:** TCN-2023-NCLT-01346
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/unitech-machines-limited-26152ff2

## Summary

### Background

The case involves an application filed by Unitech Machines Karmchari Sangh, representing 92 workmen, against Mr. Vivek Raheja, the Resolution Professional (RP) of Unitech Machines Limited. The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to declare a layoff notice issued by the RP on 01.02.2020 as illegal and arbitrary. The Corporate Insolvency Resolution Process (CIRP) had commenced against Unitech Machines Limited following the admission of an application under Section 7 of the IBC on 01.03.2019. The applicant union had previously moved an application under Section 60(5) seeking directions for the RP to release salaries/wages/statutory dues.

## Facts

On 01.03.2019, an application under Section 7 of the IBC, 2016, was admitted against Unitech Machines Limited, initiating the Corporate Insolvency Resolution Process (CIRP). On 21.07.2019, the applicant union moved an application under Section 60(5) of the IBC seeking directions to the Resolution Professional (RP) for releasing salaries/wages/statutory dues. The RP had released salaries and dues up to March 2020. On 01.02.2020, the RP issued a layoff notice without clearing legitimate dues and statutory dues. The applicant union contended that the layoff was illegal and in violation of the Industrial Disputes Act, 1947, and the UP Industrial Disputes Act, 1947. The RP argued that the layoff was necessary due to the financial burden on the Corporate Debtor and the

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## Issues and analysis

### Issue 1: Whether the layoff notice dated 01.02.2020 issued by the Resolution Professional is illegal and …

**Ratio:** Section 238 of the IBC, 2016, states that the provisions of the Code shall have effect,

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**Reasoning:** The tribunal reasoned that Section 238 of the IBC overrides any inconsistencies with

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**Interpretation:** Section 238 of the IBC is interpreted to mean that in cases of conflict between

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**Application:** The tribunal applied Section 238 to the facts, concluding that the provisions

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## Parties

- **Judges:** SHRI. BACHU…; SHRI. RAHUL…
- **Appellants:** Unitech Machines…
- **Respondents:** Unitech Machines…; Vivek R…

## Timeline

- **2019-03-01 — Admission of Application…**: Application filed under Section 7, IBC, 2016 against the Corporate Debtor was admitted,…
- **2019-07-21 — Application under…**: Applicant Union moved a separate Application under Section 60(5) of the Insolvency and…

## 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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