One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: Yes, you can recover your pending salary even if the company claims bankruptcy. File a claim with the Resolution Professional if insolvency is pending, or take action before the labour commissioner and civil court. Your salary is treated as operational debt under the Insolvency and Bankruptcy Code (IBC). Do not delay — limitation periods apply.
Anil Gupta was laid off from Zomato India in November 2025. His October 2025 salary — a sum of ₹1,20,000 — remained unpaid. The founder told him bluntly: "You can complain wherever you want. We've already filed for bankruptcy." Anil had already approached the labour department in Indore, but no reply came for weeks.
That's when he reached the Chamber of Advocate Sudhir Rao. The first thing done was to check if insolvency proceedings had actually been initiated. They had not. The founder's threat was just that — a threat. Advocate Sudhir Rao and his office then sent a detailed legal notice to the company, demanding payment within 15 days. The company did not respond. A complaint was then filed before the Assistant Labour Commissioner, Indore, under the Payment of Wages Act, 1936. And here's the thing: because the approach focused on the exact procedural and evidentiary requirements for salary claims against corporate employers, the matter was resolved in just three months. The client got his full salary plus costs. The domain-specific experience in dealing with employer-salary disputes and bankruptcy bluff strategies made the difference.
Key Facts of the Case
- Anil Gupta was employed at Zomato India and laid off in November 2025.
- His salary for October 2025 (₹1,20,000) remained unpaid for over 5 months.
- The company's founder falsely claimed the company had filed for bankruptcy.
- No insolvency proceedings had been initiated under the IBC at that time.
- Initial labour department complaint in Indore yielded no response for weeks.
- Advocate Sudhir Rao's office issued a legal notice, then filed a complaint under the Payment of Wages Act, 1936.
- The matter was resolved in three months — the client received full salary plus costs.
The Direct Legal Answer
Can I recover my salary if the company claims bankruptcy?
Absolutely. The founder's statement that the company has filed for bankruptcy does not automatically extinguish your right to unpaid salary. The first step is to verify if insolvency proceedings have actually been initiated under the IBC. If they have, you must file your claim with the Resolution Professional, as employees are operational creditors with priority claims. If not, you can proceed before the labour commissioner or civil court. Do not accept the founder's word at face value.
What if the labour department doesn't respond?
Visit the Assistant Labour Commissioner's office physically. Many state departments require in-person follow-up. If that fails, file a civil suit for recovery of unpaid wages before the jurisdictional civil court. A legal notice is often the fastest way to get the employer's attention before litigation begins.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Do not rely on oral promises. Get everything in writing — emails, WhatsApp messages, termination letters. And here's the key: salary recovery matters often involve complex corporate structures and bankruptcy bluff techniques. An advocate who regularly handles employment and labour disputes will know the exact procedural steps — like filing a claim before the Resolution Professional or getting the labour commissioner to issue a summons. General practitioners may miss these nuances.
Applicable Sections of Law
- Payment of Wages Act, 1936 — Section 15 allows employees to file a claim for unpaid wages before the labour commissioner or authority.
- Insolvency and Bankruptcy Code, 2016 — Section 53 gives priority to workmen's dues over other unsecured creditors. Employees are operational creditors under Section 5(20).
- Indian Contract Act, 1872 — Section 73 allows recovery of damages and compensation for breach of contract, including unpaid salary.
- Code of Civil Procedure, 1908 — Order 38 allows attachment of property before judgment if the employer is likely to dissipate assets.
Limitation Period
For a claim under the Payment of Wages Act, you must file within 12 months from when the wages became due. Under the IBC, the claim must be filed within 30 days of the insolvency commencement date — though late claims may be admitted in some cases. Missing limitation can be fatal unless you file a condonation of delay application. Act fast.
Interim Reliefs Available
You can seek attachment before judgment under Order 38 CPC if you have reason to believe the employer is about to sell assets or move money out of reach. In IBC proceedings, an interim moratorium immediately freezes all recovery actions except for claims filed with the Resolution Professional. Status quo orders may also be sought in civil court to preserve the employer's assets. These early steps can prevent the company from becoming a shell.
If You Are the Victim
- Gather all documents: appointment letter, salary slips, bank statements showing non-payment, termination letter, and email/WhatsApp exchanges with the employer.
- Issue a legal notice to the employer demanding payment within 15 days.
- File a complaint before the Assistant Labour Commissioner in your city.
- If the company has filed for insolvency, file your claim with the Resolution Professional immediately.
- Consider a civil suit for recovery before the jurisdictional civil court if the amount is substantial.
Documents You Must Keep Ready
- Aadhaar card and PAN card for identity proof >li>Employment offer letter and appointment letter
- Salary slips for the month(s) unpaid
- Bank statements showing salary pattern and non-payment
- Termination or layoff letter from the employer
- Email and WhatsApp communication with the employer regarding the unpaid salary
- Legal notice sent to the employer and its acknowledgment
- Copy of any complaint filed with the labour department
What Evidence Is Required?
- Primary evidence: Original employment contract, salary slips, and bank statements showing salary credits.
- Secondary evidence: Certified copies of emails, WhatsApp chats, and call recordings (with caution on consent requirements under Indian evidence law).
- Witness testimony from colleagues or former employees who can confirm the non-payment.
- Audit reports or financial statements of the company showing cash flow.
- Any admission by the employer — written or oral — about the pending salary.
How Courts Typically Approach Such Cases
Labour courts and civil courts approach salary recovery with a pro-employee presumption. They look at the employment contract, salary records, and the employer's conduct. If the employer claims bankruptcy, the court will demand proof — a mere statement is not evidence. The trend is to award salary plus interest at 12-18% per annum from the due date. Courts are also quick to pass interim orders attaching the employer's assets if there is a risk of dissipation. So the approach is both protective and remedial.
Timeline of Legal Process
- Step 1 (Legal Notice): 2-3 weeks for drafting, sending, and waiting for response.
- Step 2 (Labour Complaint): 2-4 months for the labour commissioner to issue notice and hold a hearing.
- Step 3 (Civil Suit): Filing the suit takes 1-2 months; first hearing in 2-3 months; final disposal can take 6-12 months if contested.
- Step 4 (Execution): If the employer does not pay voluntarily, execution proceedings take another 3-6 months.
- In most straightforward cases, recovery happens within 4-8 months.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Yes. Most salary recovery matters can be settled through mediation or before the Lok Adalat. The employer often prefers settlement to avoid litigation costs and negative publicity. If the offence is not compoundable (under criminal law for non-payment of wages), the civil aspect is always amenable to a compromise deed under Section 89 CPC. Lok Adalats have high success rates for pending salary disputes. Settlement is advisable when the employer is genuinely unable to pay — you get something rather than nothing.
Common Mistakes People Make
- Believing the employer's verbal claim of bankruptcy without verifying — always check the NCLT website for insolvency petitions.
- Deleting emails and WhatsApp messages after the dispute begins — preserve everything as evidence.
- Discussing the case directly with the employer or founder without a lawyer present — every admission can be used against you.
- Posting about the dispute on social media — it can prejudice your claim and be considered defamatory.
- Engaging a lawyer without domain-specific experience in employment and labour law. General practitioners may not know the specific procedures under the Payment of Wages Act or the IBC claim process. An advocate who handles employer-salary disputes regularly will know how to handle bankruptcy bluff tactics, file claims with the Resolution Professional, and secure attachment orders — all of which can shorten the timeline and increase the chance of full recovery.
- Waiting too long — the limitation period is tight, and delay can be fatal.
FAQs People Normally Have
What if the company is actually in insolvency?
File your claim with the Resolution Professional (RP) as an operational creditor under the IBC. Submit your employment contract, salary slips, and proof of unpaid wages. The RP must verify and admit your claim — employees are priority creditors under Section 53.
Can I get interest on delayed salary?
Yes. Courts and labour authorities often award interest at 12-18% per annum from the date the salary became due. The Payment of Wages Act allows up to 10% penalty on delayed wages.
Does the company need to be operational for me to recover?
No. Even if the company has ceased operations or is under liquidation, you can still recover from the assets. Under the IBC, liquidation proceeds are first used to pay insolvency resolution costs, then workmen's dues (up to 24 months), then other creditors.
Can I file a criminal case for non-payment of salary?
Non-payment of wages is primarily a civil and labour law matter. Criminal provisions under the Indian Penal Code for cheating (Section 420) may apply only if there was a fraudulent intent at the time of hiring. This is rare. The better route is the civil and labour route.
How many months of salary can I claim?
Generally, you can claim up to 12 months of unpaid salary. The limitation period under the Payment of Wages Act is 12 months from the due date. For claims beyond that, a civil suit may be filed, but the limitation period for contract claims under the Limitation Act, 1963 is three years from the date of breach.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India