The Sikkim High Court has held that an employee-continuity clause in an amalgamation scheme protects only those who remained employed by the transferor company when the merger became effective. Former workers cannot rely on the clause after their employment relationship has already shifted.
The petitioners had served as regular employees of Lanco Teesta Hydro Power Limited but accepted fixed-tenure appointments with NHPC in 2019 under an insolvency resolution plan. When LTHPL was later amalgamated with NHPC, they sought permanent absorption under the scheme’s continuity provision.
The court rejected the claim because they had ceased to be LTHPL employees well before the amalgamation. The ruling treats the effective date as the decisive point for identifying protected employees and prevents merger clauses from retrospectively reviving employment relationships that had already ended. The writ petition was dismissed.
