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When Workers Block Access: Asset Verification in CIRP

Factory workers preventing entry over unpaid dues is common and cannot be solved by correspondence. What the RP has to do before valuers can work, and how to protect...

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5 min
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Topic
IBC Insolvency
Published
September 5, 2026
Last updated
Sep 28, 2026
Reading time
5 min
0:00
Last updated: September 2026Verified against: Government sources

A resolution professional arrives at a factory with two registered valuers and finds the gate held by workers who have not been paid for eleven months.

They are not obstructing out of malice. They are protecting the only leverage they have.

This is one of the most common practical obstacles in a manufacturing CIRP, and it is not a legal problem. It is a negotiation.

Why it happens, and why it is rational

Employees of a distressed company are usually months in arrears. When the company enters CIRP, they see professionals arriving to catalogue and value assets, and they draw an obvious conclusion: the plant is being prepared for sale, and once the machines leave, their claim is worth nothing.

Physical control of the premises is the only real leverage they have. Understanding that is the starting point for resolving it — because the workforce is not asking for something outside the process. Workmen's dues rank at the top of the Section 53 waterfall, alongside secured creditors who relinquish security, for the twenty-four months preceding liquidation commencement. The waterfall →

Their claim is real and it is senior. The dispute is about timing and trust, not entitlement.

What actually works

Engage directly, and early. Meet the workers and their union representatives before attempting entry with a team of valuers. An RP who first appears alongside strangers with clipboards has confirmed the fear rather than addressed it.

Explain the process honestly. That valuation is a statutory requirement, that it precedes any decision, that a resolution — if one is achieved — is far more likely to preserve employment than liquidation, and that their dues have priority in the distribution.

Register their claims properly. Employees are creditors. Getting claims filed and admitted converts an adversarial relationship into a procedural one, and gives the workforce a stake in the process running properly.

Offer visibility. Allowing a worker representative to accompany the verification addresses the fear that assets will disappear, and costs nothing. It also produces a second witness to the custody record.

Be realistic about what you can promise. An RP cannot guarantee payment. Promising outcomes to obtain access creates a worse problem later.

Protecting the timeline while you resolve it

The valuation deadlines run from the insolvency commencement date regardless. Regulation 27 →

So run these in parallel with the negotiation:

  • appoint the valuers anyway, within the statutory window — appointment is not conditional on access;
  • have them begin on desk work and off-site sources — filings, registries, lender records;
  • document every attempt at access, dated, with who was present and what was said;
  • escalate where engagement fails — to the CoC, and where necessary to the Adjudicating Authority;
  • verify what can be verified, and record precisely what could not.

What the valuation report should say

  • which assets were not physically verified, specifically;
  • the reason — access denied, and the period;
  • what was relied on instead;
  • the effect on the estimate;
  • confirmation that verification will be completed when access is obtained, if the report is issued in the interim.

A report that quietly presents estimates for assets nobody saw is the defective one. Why desk valuation fails →

Key takeaways

  • The obstruction is rational. Workers are protecting a senior claim.
  • Engage before arriving with valuers, not after.
  • Register employee claims early — it changes the relationship.
  • Offer a worker representative at verification. It costs nothing.
  • Do not promise payment. It creates a worse problem.
  • Appoint valuers on time regardless — appointment is not conditional on access.
  • Document every attempt on the day.

Read next

Disclaimer: Positions stated as on 5 September 2026. General guidance only — employee claims and access disputes are fact-specific.

Quick recapKey facts & short answers

Key Facts About Workers Block Access

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes the entire process end to end for you.

Why do workers block access during a CIRP?

Because unpaid dues leave them with physical control of the premises as their only leverage, and they fear assets being removed before their claims are met.

Can the RP simply obtain an order for access?

An order may be available, but enforcement against a workforce is slow and damaging. Engagement resolves it faster and preserves the ability to run the plant.

Workers Block Access: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

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Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

People also ask

Questions, answered

Short, direct answers to the 6 questions readers ask most on this topic.

Because unpaid dues leave them with physical control of the premises as their only leverage, and they fear assets being removed before their claims are met.

An order may be available, but enforcement against a workforce is slow and damaging. Engagement resolves it faster and preserves the ability to run the plant.

No. Appoint the valuers within the statutory window regardless, begin off-site work, and document the obstruction contemporaneously.

At the top of the Section 53 waterfall, alongside secured creditors who relinquish security, for the twenty-four months preceding liquidation commencement.

It is usually helpful. It addresses the fear of asset removal and provides an additional witness to the custody record.

Which assets were not verified, why, what was relied on instead, and the effect on the estimate.