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2021 (10) TMI 712 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - application is barred by limitation or not? - HELD THAT - Admittedly, this application is filed on 16.03.2020, as per demand notice (which is at page 43 relevant page 44 of petition), the date of default is mentioned as 31.12.2016 - In part-IV of the application, the petitioner has also averred the date of default first arose on 31.12.2016, on the ground that the petitioner has claimed his salary for the period of November and December, 2016. The emails exchanged in between the parties do not show the acknowledgement of debt towards the salary for the period of November and December 2016. Rather, it was made clear by the Human Resource Department of Corporate Debtor that as per note, no salary is due. Therefore, on the basis of these emails, the contention of the petitioner, cannot be admitted that these emails are amounts to acknowledgement of debt by the Corporate Debtor - further apart from the emails, there is no other document to show that the Corporate Debtor has ever acknowledged the debt of the petitioner. Hence, the benefit of Section 18 of Limitation Act cannot be allowed. Since, the default as per the averments made in demand notice as well as Part-IV of the application was occurred on 31.12.2016 and the petition is filed on 16.03.2020. Whereas, in view of Article 137 of the Limitation Act, the petition must be filed within three years when right to apply accrues. But it is filed on 16.03.2020 i.e. much after the three years when the default has occurred - the present application is barred by limitation and the same is liable to be dismissed. Application dismissed.
Issues Involved:
1. Jurisdiction and applicability of the Insolvency and Bankruptcy Code, 2016. 2. Limitation period for filing the petition. 3. Acknowledgment of debt by the Corporate Debtor. 4. Compliance with employment terms and resignation notice period. 5. Claim of unpaid salary, leave encashment, and gratuity. Issue-wise Detailed Analysis: 1. Jurisdiction and Applicability of the Insolvency and Bankruptcy Code, 2016: The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the operational creditor for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor Company. The Corporate Debtor contended that the disputes should be adjudicated by ordinary civil courts and not under the Insolvency and Bankruptcy Code. 2. Limitation Period for Filing the Petition: The Corporate Debtor argued that the claims were barred by limitation, as the petition was filed on 16.03.2020, whereas the date of default was 31.12.2016. According to Article 137 of the Limitation Act, the petition must be filed within three years from when the right to apply accrues. The tribunal noted that the default occurred on 31.12.2016, and the petition was filed much after the three-year limitation period, making it time-barred. 3. Acknowledgment of Debt by the Corporate Debtor: The Operational Creditor claimed that the debt was acknowledged by the Corporate Debtor through emails exchanged on 21.11.2019. However, the tribunal examined these emails and concluded that they did not show acknowledgment of the debt. The Human Resource Department of the Corporate Debtor had stated that no salary was pending as per the note on the ECF. The tribunal found no other documents indicating acknowledgment of debt and thus did not extend the limitation period under Section 18 of the Limitation Act. 4. Compliance with Employment Terms and Resignation Notice Period: The Corporate Debtor contended that the Operational Creditor failed to serve the mandatory six-month notice period after resignation and did not report to work after 08.11.2016. The Operational Creditor argued that he had complied with the resignation process and handed over the necessary identification cards as instructed. The tribunal reviewed the evidence, including certificates and emails, but primarily focused on the limitation issue. 5. Claim of Unpaid Salary, Leave Encashment, and Gratuity: The Operational Creditor claimed unpaid salary for November-December 2016, leave encashment, and gratuity amounting to ?15,55,000. The Corporate Debtor denied these claims, arguing that the Operational Creditor did not fulfill his duties and breached the employment terms. The tribunal did not delve deeply into the merits of these claims due to the primary finding on the limitation issue. Conclusion: The tribunal concluded that the petition was barred by limitation as it was filed beyond the three-year period from the date of default. The emails cited by the Operational Creditor did not constitute acknowledgment of debt, and there was no other evidence to extend the limitation period. Consequently, the application was dismissed.
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