2019 (12) TMI 1643 - AT - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - threshold limit of salary not being paid - Appellant submits that even if the salary of recent year is taken into consideration, which is more than Rs.1 Lakh, it having not been paid by the Corporate Debtor, the application under Section 9 was maintainable. HELD THAT - From application under Section 9 filed by the Appellant, it is found that the appellant has shown particulars of the claim under following heads - Salary for the period December, 2014 to March, 2015, which is barred by limitation; Reimbursement of amount for FY 2014-15 as per SAP Ledger Statement, which is also barred by limitation; Salary for the period August, 2016 to March, 2017 plus TDS; TDS of certain period; Leave encashment for July, 2013 - March, 2017 - however, the Adjudicating Authority noticed that the claim for the period April, 2016 to March, 2017 do not pertain to the Corporate Debtor - 'M/s DSC Ltd.' but to M/s DSCL - FENGSHUN-WANAG Consortium' as stated by Appellant in Form-5. The application was filed by the Appellant with an intent to receive the dues from the Corporate Debtor and not with intention for resolution or liquidation, therefore, the Adjudicating Authority rightly rejected the prayer of the Appellant - So far as the question as to whether the documents are forged or not is concerned, it cannot be determined by the Adjudicating Authority (National Company Law Tribunal) or this Appellate Tribunal and therefore, the Adjudicating Authority rightly not deliberated on such issue. Appeal dismissed.

Summary

Issues Involved:
- Maintainability of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
- Validity of the claim for salary, reimbursement, TDS, and leave encashment.
- Determination of the intent behind filing the application.
- Consideration of documents and allegations of forgery.

Analysis:

1. Maintainability of the Application under Section 9: The Appellant, an employee of 'M/s DSC Ltd.', filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the employer 'M/s DSC Ltd.' The Adjudicating Authority rejected the application, citing that the Applicant had filed Form 26AS for certain financial years when TDS was deposited by the consortium, not the Respondent. The Appellant argued that even if the recent year's salary exceeding Rs.1 Lakh remained unpaid by the Corporate Debtor, the application should be maintainable.

2. Validity of the Claim: The Appellant's claim included salary for specific periods, reimbursement, TDS amounts, and leave encashment. However, the Adjudicating Authority noted that the claim for a particular period did not pertain to the Corporate Debtor but to another entity, M/s DSCL - FENGSHUN-WANAG Consortium. This discrepancy raised concerns about the accuracy and validity of the claim presented by the Appellant.

3. Intent behind Filing the Application: The Tribunal observed that the Appellant's application seemed to be primarily aimed at recovering dues from the Corporate Debtor rather than seeking resolution or liquidation. This lack of genuine intent for resolution or liquidation led to the rejection of the application by the Adjudicating Authority. The Tribunal emphasized the importance of the purpose behind initiating insolvency proceedings and found the Appellant's motives lacking in this regard.

4. Consideration of Documents and Allegations: The Tribunal clarified that the determination of whether the submitted documents were forged or not was beyond the jurisdiction of the Adjudicating Authority or the Appellate Tribunal. Therefore, the Adjudicating Authority was correct in not deliberating on the issue of alleged forgery. The focus remained on the substantive issues related to the claim and the intent behind the application rather than peripheral matters such as document authenticity.

5. Conclusion: Due to the identified infirmities in the claim and the lack of a genuine intent for resolution or liquidation, the Tribunal dismissed the appeal for being without merit. The judgment underscores the importance of maintaining accuracy in claims, demonstrating a genuine intent for insolvency proceedings, and focusing on substantive issues rather than ancillary matters like document authenticity.