Calcutta High Court, in M/s. Stesalit Limited vs. Union of India & Ors. (WPA 532 of 2025), recently held that gratuity payments are excluded from a corporate debtor’s estate under the Insolvency and Bankruptcy Code, 2016 (“IBC“) and distinct from other liabilities. The court observed that a Corporate Insolvency Resolution Process leads to a change in management but does not extinguish the company’s labor law obligations. Consequently, the court directed the employer to pay the full gratuity amount due to employees, along with interest.
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