2021 (3) TMI 301 - Tri - Insolvency and Bankruptcy

Revision of claim towards salary after the approval of resolution plan - ledger does not show that such an increase of salary was credited every month to his salary account being the salary for each month - Whether the applicant is eligible to get the relief sought for in this application based on the documents produced by him as per the order dated 14.12.2020 by this Tribunal and whether the documents were submitted within the time prescribed in the order? - HELD THAT - As per the Resolution Professional, the Applicant had submitted his claim by citing his salary as ₹ 12,05,000/- (Rupees Twelve Lakhs Five Thousand Only) per month from August, 2017 to April, 2019 and claimed the privilege leave, PF and gratuity by taking the said amount as base salary. However, during verification of records by the R.P, it was found that the salary due entries are not shown in the ledger of Mr. P Jayagovind (applicant) from FY 2017-18 onwards, in the books of the Corporate Debtor. For this purpose, he has relied upon the relevant records of the Corporate Debtor as well as the internal information shared with him while conducting the verification of the claim. Based on the same, he had re-computed the salary and allowances payable to the applicant (claimant) in view of the information available on record, which amounts to ₹ 91,10,085. But, an amount of ₹ 1,11,08,088/- is shown as paid in advance to Mr. Jayagovind as per the ledger data. The Claim submitted by the Applicant is silent on that aspect. Timely submission of documents with RP - HELD THAT - The applicant should have submitted the documents sought for by the RP within 2 weeks from 14.12.2020. In the order in MA/177/KOB/2020, it was clearly stated that since the Resolution Professional (R.P) had already been received Resolution Plan from the prospective Resolution Applicant and the same is under consideration of the Committee of Creditors; the R.P was directed to explore all possibilities to settle the claim of the applicant and give a reply to the applicant before finalisation of the Resolution Plan. The 14 days from 14.12.2020 expired on 27.12.2020. However, the applicant has submitted his documents only on 28.12.2020. Being aware that the Resolution Plan is to be considered and got approved from the Adjudicating Authority; the applicant should not have waited till the last moment of convening the CoC. Furthermore, it is a well-established principle of law Vigilantibus Et Non Dormientibus Jura Subveniunt which means the law assists those who are vigilant with their rights, and not those that sleep thereupon. The Applicant had very conveniently decided to sleep over his right from the order dated 14.12.2020. It is only at this ripe stage when the CoC has already approved the Resolution Plan that the Applicant suddenly decided to make his claim again. Hence there is no error in not considering the claim of applicant submitted after the time allowed, that too after the CoC meeting. Application dismissed.

Summary

Issues Involved:
1. Legality of the Annexure AXIV order dated 29/12/2020.
2. Validity of the retrospective reduction of the applicant's salary.
3. Direction to refix the eligible claim based on the original salary.
4. Realization of costs from the respondent.

Detailed Analysis:

1. Legality of the Annexure AXIV Order Dated 29/12/2020:
The applicant sought to set aside the Annexure AXIV order issued by the Resolution Professional (RP) on 29/12/2020, alleging inherent illegality and willful malafides. The Tribunal examined whether the RP's actions were in compliance with the Tribunal's previous orders and the principles of natural justice. The applicant argued that the RP did not provide an opportunity to substantiate his claim, violating Regulation 10 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. However, the Tribunal found that the applicant submitted the required documents only on 28/12/2020, a day after the deadline of 27/12/2020, and noted that the RP had already finalized the Resolution Plan by then. The Tribunal concluded that there was no error in the RP's actions, and the application lacked merit.

2. Validity of the Retrospective Reduction of the Applicant's Salary:
The applicant contended that his salary was unlawfully reduced from ?12.05 lakhs to ?1.05 lakhs per month retrospectively, without notice or hearing. He presented bank statements and Income Tax Returns to support his claim of a higher salary. The RP, however, argued that the salary reduction was recorded in the Corporate Debtor's ledger and that the applicant failed to provide sufficient documentation to substantiate his claim. The Tribunal found that the records did not clearly show the salary increase and that the applicant's claim lacked adequate evidence. The Tribunal upheld the RP's decision, noting that the salary entries in the ledger supported the reduced amount.

3. Direction to Refix the Eligible Claim Based on the Original Salary:
The applicant requested the Tribunal to direct the RP to refix his eligible claim based on a salary of ?12.05 lakhs per month for the period from January 2018 to April 2019. The RP had recomputed the applicant's salary and allowances based on the available records, which indicated a lower salary. The Tribunal found that the applicant's claim was not substantiated by the records and that the RP's recomputation was based on the accurate information available. Consequently, the Tribunal did not find any grounds to direct the RP to revise the applicant's claim.

4. Realization of Costs from the Respondent:
The applicant sought to recover the costs of the proceedings from the RP. Given that the Tribunal found no merit in the applicant's claims and upheld the RP's actions, it did not grant this relief. The Tribunal emphasized the principle of "Vigilantibus Et Non Dormientibus Jura Subveniunt," meaning the law assists those who are vigilant with their rights and not those who sleep on them. The applicant's delay in submitting the required documents and his failure to substantiate his claims led the Tribunal to dismiss the application.

Conclusion:
The Tribunal dismissed the Interlocutory Application No. IA(IBC)/28/2021, finding no merit in the applicant's claims. The RP's actions were upheld as compliant with the law and the Tribunal's previous orders. The applicant's failure to submit documents on time and substantiate his salary claim resulted in the dismissal of his application. The Tribunal did not grant any of the reliefs sought by the applicant.