2017 (11) TMI 1978 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - settlement of arrears of salary - time limitation - HELD THAT - The defence taken by the Respondent/ Corporate Debtor is highly contradictory, if the dues of the employee have been settled, and there is nothing outstanding, then, the argument that the claim is barred by lirnitation does not carry any weight. The other defence that has been taken by the Respondent/ Corporate Debtor is that it has paid on 31.07.2015 as arrear of salary. In support of the same, they placed on record 'payment voucher' filed with the Written Arguments which goes to show that the entry 'pay to' is filled with name N. Subramanian ; entry 'Rupees' is filled with words Two Lakh and Ten Thousands only and entry 'Rs. ' is filled with amount, 2, 10,000/- . These are being written in one hand writing. However, entry 'debt' is filled with the words salary arrears and entry '(particulars)' is filled with the words full final settlement of salary as on date which are in different hand writing. The 'payment voucher' per se reflects that a fraud is being played on the Petitioner/ Operational Creditor, which can easily be identified with the naked eyes. Therefore, the entries relating to the salary arrears and full final settlement of salary as on date seem to have been entered with mala fide intention to show that the amount paid is full and final settlement of the arrears of salary, which in no circumstances could be relied upon. The Corporate Debtor defaulted in making payment arrears of the salary to the Petitioner/ Operational Creditor. The Operational Creditor has complied with requirements under Sections 8, 9 (3) (b) (c) of I B Code, 2016 and has made out a case for admission of the Application under Section 9 of the Insolvency and Bankruptcy Code, 2016. Application admitted - moratorium declared.

Summary

Issues:
1. Claim for arrears of salary dues by an ex-employee against a corporate debtor.
2. Dispute regarding payment of salary arrears and fraudulent claim of settlement by the corporate debtor.
3. Filing of a civil suit by the corporate debtor to circumvent insolvency resolution process.
4. Admission of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
5. Appointment of an Insolvency Resolution Professional (IRP) and declaration of moratorium.

Analysis:

Issue 1:
The ex-employee filed a claim for arrears of salary dues against the corporate debtor, citing promises made by the managing director regarding settlement. The petitioner provided evidence of salary entitlements and non-payment, supported by letters and reports.

Issue 2:
The corporate debtor disputed the claim, alleging payment and raising a defense of limitation. However, the evidence presented by the debtor, a payment voucher, was rejected as fraudulent by the tribunal. The tribunal found the claim not time-barred based on acknowledgments of arrears by the debtor.

Issue 3:
The corporate debtor's filing of a civil suit to challenge the petitioner's claim was deemed malafide and an attempt to avoid insolvency resolution. The tribunal concluded that the suit was fraudulent and did not constitute a genuine dispute.

Issue 4:
After considering the arguments and evidence, the tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, as the corporate debtor defaulted in payment of salary arrears to the petitioner. The tribunal ordered the commencement of the Corporate Insolvency Resolution Process.

Issue 5:
The tribunal appointed an Insolvency Resolution Professional (IRP) and declared a moratorium to protect the debtor's assets during the resolution process. The IRP was directed to manage the debtor's affairs and comply with the relevant provisions of the Code. The directors and management were instructed to cooperate with the IRP.

In conclusion, the tribunal found in favor of the petitioner, admitted the insolvency application, appointed an IRP, and declared a moratorium to facilitate the resolution process. The decision aimed to protect the interests of both parties and ensure a fair resolution of the financial dispute.