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krishna   19 October 2021

Cirp period employee leave encashment and gratuity dues

Company was admitted to the CIRP process under section 7 of the IBC.

There were 8 employees who were retained during the CIRP period. 5 of them were terminated in the CIRP period and 2 were automatically relieved on the date when company was ordered to liquidation process.

The resolution professional is only paying the Leave encashment and Gratuity dues during the CIRP period and the employee benefits prior to the CIRP period is being taken as the workmen/employee claims under the waterfall mechanism.

Query: 

Since the dues (i.e, leave encashment and gratuity) have accrued on the date of termination/relieving is the resolution professional bound to take the complete dues as the CIRP cost or the bifurcation as pre CIRP and CIRP period is admissible as per law.



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