Court holds that only employees on the rolls of Lanco Teesta Hydro Power Limited on amalgamation date can claim benefits under scheme; Petitioners who accepted fixed tenure employment with NHPC prior to amalgamation denied relief
In a significant judgment delivered on September 11, 2026, the Sikkim High Court, led by Chief Justice A. Muhamed Mustaque, dismissed a writ petition filed by former employees of Lanco Teesta Hydro Power Limited (LTHPL) seeking permanent absorption into National Hydro Electric Power Corporation (NHPC) Limited following a scheme of amalgamation.
The petitioners had initially been regular employees of LTHPL, a public limited company. However, insolvency proceedings were initiated against LTHPL in 2019 under the Insolvency and Bankruptcy Code, 2016, following a petition by ICICI Bank Limited. Subsequently, NHPC acquired LTHPL as a subsidiary under a resolution plan approved by the National Company Law Tribunal (NCLT), Hyderabad, in October 2019.
Post-acquisition, NHPC offered the petitioners fixed tenure employment for one year starting December 26, 2019, which they accepted. This employment arrangement effectively ended their status as employees of LTHPL prior to the scheme of amalgamation, which was approved by the Central Government and came into effect in 2025.
The Ministry of Corporate Affairs' order on the amalgamation stipulated that employees of the transferor company (LTHPL) on the date of amalgamation would be deemed employees of the transferee company (NHPC) and entitled to all benefits. However, the Court clarified that this provision applies exclusively to those who were on LTHPL's rolls as of the amalgamation date.
Since the petitioners had ceased to be employees of LTHPL before the amalgamation by accepting fixed tenure employment with NHPC, they were not eligible for benefits under the scheme of amalgamation. The Court emphasized that persons not employed by the transferor company on the effective date cannot invoke the scheme's continuation benefits.
Accordingly, the Court dismissed the petition, holding that the petitioners cannot claim relief based on the amalgamation order or scheme, and no costs were awarded.
This judgment underscores the legal principle that employee benefits under amalgamation schemes are contingent upon continuous employment with the transferor company until the effective date of amalgamation, and those who leave before that date cannot claim such benefits.
Bottom Line:
Employees of a transferor company cannot claim benefits under a scheme of amalgamation if they ceased to be employees of the transferor company before the date of amalgamation.
Statutory provision(s):
Companies Act, 2013 Section 2(45), Insolvency and Bankruptcy Code, 2016 Section 7
Homnath Neopaney v. NHPC Limited, (Sikkim) : Law Finder Doc Id # 2981990
