The corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) is a powerful tool designed to resolve corporate insolvency. However, it is important to understand that CIRP is not the remedy if your welfare benefits are due, such as leave travel concession (LTC) or leave encashment. These unpaid benefits are classified as welfare claims, not operational debts, and therefore, cannot be used to initiate CIRP. The case of Kishore K. Lonkar v. Hindustan Antibiotics Limited provides critical clarity on this issue.
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