Fixed-Tenure NHPC Employees Denied Absorption Benefits Post-Amalgamation: Sikkim High Court

Overview

The Sikkim High Court, in Homnath Neopaney Vs NHPC Ltd., delivered a significant ruling on the interplay between insolvency resolution outcomes, fixed-tenure employment, and the employee protection clauses embedded in corporate amalgamation schemes. The Court dismissed the writ petition filed by former Lanco Teesta Hydro Power Limited (LTHPL) employees who sought permanent absorption into NHPC Limited following the 2025 merger of LTHPL with NHPC, holding that the amalgamation's employee-protection clause could not be invoked by individuals who had already ceased to be employees of the transferor company prior to the effective date of the scheme.

Case Details

Background and Factual Matrix

Original Employment with LTHPL

The petitioners in this matter were initially engaged as regular employees of M/s Lanco Teesta Hydro Power Limited (LTHPL), a public limited company. Their appointment orders and subsequent promotions clearly established their status as regular employees on the rolls of LTHPL.

Insolvency Proceedings Against LTHPL

The trajectory of events changed significantly when ICICI Bank Limited initiated insolvency resolution proceedings against LTHPL before the National Company Law Tribunal (NCLT), Hyderabad, in the year 2019, by filing a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016. Following the approval of the resolution plan by the NCLT, LTHPL was converted into a subsidiary company of NHPC Limited with effect from 09.10.2019, and consequently became a Government company within the meaning of Section 2(45) of the Companies Act, 2013.

Transition to Fixed-Tenure NHPC Employment

Following the resolution plan's implementation, NHPC Limited extended fixed-tenure employment offers to the petitioners for a period of one year, with effect from 26.12.2019. The petitioners accepted these fixed-tenure appointments, thereby transitioning from being employees of LTHPL to becoming fixed-tenure employees of NHPC Limited — the parent company.

Critical Fact: Upon accepting these fixed-tenure appointment letters in 2019, the petitioners formally ceased to be employees of LTHPL, the subsidiary company.

The 2025 Amalgamation Scheme

While the petitioners were continuing in their capacity as fixed-tenure employees of NHPC Limited, a joint confirmation petition was filed before the Central Government on 09.10.2023, proposing the amalgamation of LTHPL with NHPC Limited. This petition was subsequently approved by the Ministry of Corporate Affairs, Government of India, vide order dated 02.01.2025.