The National Company Law Appellate Tribunal (NCLAT) has upheld an earlier order directing the Jet Airways to pay provident fund (PF) and gratuity dues in full to its employees. It has further dismissed the appeals filed by the State Bank of India (SBI) and seven other financial creditors.
During the hearing, lenders argued that provident fund, gratuity, and pension fund dues should form part of the liquidation estate and be distributed among all creditors under the IBC, and contended that such dues could be excluded only if dedicated provident fund and gratuity funds existed at the commencement of liquidation.
They (banks) also sought to include the period spent in litigation while calculating the 24-month window for workmen’s dues. Had that plea been accepted, employees would have lost their priority status for payment under the IBC.
NCLAT upheld a February 4 order of the National Company Law Tribunal (NCLT), directing that May 20, 2020, be treated as the effective date for calculating the 24 months’ worth of workmen’s dues entitled to priority under the Insolvency and Bankruptcy Code (IBC).
Jet Airways To Pay PF, Gratuity Dues In Full To Former Employees: NCLAT
