Pranayo Ltd, was incurring losses since last few years and its workers were not getting paid on a regular basis. The workers approached their Workers Union for relief. The Workers Union filed a writ petition in the High

One of the financial creditors of Pranayo Ltd has filed corporate insolvency proceedings against the Company, which has been admitted by NCLT. Parallely the Workers' Union had filed a writ petition in the High Court seeking payment of dues to workers. On a direction by the High Court, the Labour Commissioner had provided workings determining the dues. The High Court then ordered for sale of properties of Pranayo Ltd even as CIRP was in operation. This case is similar to the case as decided by the Supreme Court in Anand Rao Korada Resolution Professional (Appellant) Vs. M/S Varsha Fabrics (P) Ltd. (Respondent) In the writ petitions filed by the workers Union, the High Court passed order directing the labour commissioner to determine the dues to the workers and accordingly labour commissioner quantified the same and certain properties of the corporate debtor was put on auction sale. Meanwhile, one financial creditor initiated corporate insolvency proceedings against the corporate debtor and the NCLT fixed the moratorium. The sale of the properties was to be made during the period of moratorium and the resolution professional challenged the orders of the High Court. The Appellant Resolution Professional filed Civil Appeals to challenge the Interim Orders passed by the Odisha High Court in W.P. (Civil) No. 7939/2011 on the ground that since the CIRP against Respondent No. 4 had commenced, the proceedings before the High Court ought to be stayed. The Supreme Court held that Section 238 of the IBC gave an overriding effect to the IBC over all other laws. In view of the provisions of the IBC, the High Court ought not to have proceeded with the auction of the properties of the corporate debtor once an order declaring moratorium was passed by the NCLT. The Supreme Court set aside the orders of the High Court but stated that the Workers' Union could file an application before the competent authority under the IBC for payment of their dues. Based on the above case-law, it can be concluded that once an application is admitted by NCLT under the IBC and moratorium declared, no order regarding sale of any assets can be passed by any courts. Thus, the Order given by the High Court is not tenable.