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of <h1>Whether approved insolvency resolution plan bars continuing labour and other claims against successful resolution applicant, proceedings terminated</h1> Whether proceedings can continue against a successful resolution applicant after approval of a resolution plan: relying on SC precedent (Electrosteel; ... Seeking a declaration that the petitioner / company has contravened the provisions of Section 33(2)(b) of The Industrial Disputes Act - contention of the petitioner primarily is that they have received the company on a clean slate and that there can be no claim made by the complainant against the SRA (Successful Resolution Applicant) - whether the proceedings could have been continued further before the Industrial Tribunal after the acceptance of resolution plan? - HELD THAT:- This issue is no more in res integra as the same is concluded by the Hon’ble Supreme Court in the case of Electrosteel Steel Limited (Now M/S Esl Steel Limited vs. Ispat Carrier Private Limited [2025 (4) TMI 1246 - SUPREME COURT], wherein the Hon’ble Supreme Court by relying upon the earlier Judgments at paragraphs no.50, 50.1,51.52 has held that it is now well settled that once resolution plan is duly approved by the adjudicating authority under Sub-section 1 of Section 31 all claims which are not part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of the claim which is not a part of the resolution plan. In the case of Essar Steel India Ltd. Committee of Creditors Vs. Satish Kumar Gupta, [2019 (11) TMI 731 - SUPREME COURT], the Hon’ble Supreme Court had categorically declared that a successful resolution applicant cannot be faced with undecided claims after the resolution plan is accepted. Otherwise this would amount to a hydra head popping up which would throw into uncertainty the amount payable by the resolution applicant. It has been further observed that the lifting of the moratorium does not mean that the claim of the respondent would stand revived notwithstanding approval of the resolution plan by the adjudicating authority. Moratorium is intended to ensure that no further demands are raised or adjudicated upon during the corporate insolvency resolution process so that the process can be proceeded with and concluded without further complications. Also considering the relevant clauses of the resolution plan, there is no scope left for payment of any dues by the petitioner / company and the petitions will have to be necessarily allowed. In view of the resolution plan, as approved, the claim of the respondents would automatically stood extinguished. By virtue of the Judgment of the Hon’ble Supreme Court in the case of Electrosteel Steel Limited (Now M/S Esl Steel Limited vs. Ispat Carrier Private Limited no further claim of the respondents / employees could have been adjudicated by the Industrial Tribunal and Labour Court. Even the claim for reinstatement without back-wages cannot be considered by the Labour Court / Industrial Tribunal. The proceeding pending before the Labour Court, Aurangabad bearing Reference (IDA) No.61 of 2014 stands terminated. The impugned order dated 02.07.2025, passed by the Presiding Officer, Labour Court-II, Aurangabad and the impugned orders dated 21.01.2025, passed by the Presiding Officer, Industrial Tribunal, Aurangabad are quashed and set aside. Petition allowed. Issues: (i) Whether proceedings before the Industrial Tribunal/Labour Court in respect of claims not included in an approved resolution plan can be continued after approval of the resolution plan by the NCLT and whether the successful resolution applicant (new management) is liable for such claims.Analysis: The Court examined the effect of an NCLT-approved resolution plan and the IBC provisions relied upon by the petitioner, notably Sections 31, 32A and 238 of the Insolvency and Bankruptcy Code, 2016, together with the moratorium under Section 14. The Court referred to binding Supreme Court authority establishing that upon approval of a resolution plan claims which are not part of the approved plan stand extinguished and the resolution applicant takes the corporate debtor on a clean slate. The resolution plan clauses demonstrating express extinguishment of past claims against employees and the absence of any provision preserving the respondents' claims were considered. Applying the statutory scheme and precedents, the Court concluded that continuation or adjudication of claims not included in the resolution plan is barred and that the new management enjoys immunity from such liabilities and proceedings.Conclusion: The Industrial Tribunal/Labour Court could not continue or adjudicate the respondents' claims which were not part of the approved resolution plan; the impugned orders continuing those proceedings are quashed and set aside, and the writ petitions filed by the petitioner are allowed.
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