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2020 (1) TMI 107 - Tri - Companies LawWinding up of respondent company - recovery of outstanding dues - issuance of demand notice, demanding to pay the outstanding amount and also complied with the provisions of the Code by filing prescribed application under the Code - it is contended that the respondent's company should be deemed to be unable to pay its debt within section 434 read with section 433(e) and (f) of the Companies Act, 1956 and it should be wind up and the corporate insolvency resolution process should be initiated - HELD THAT - Admittedly, the petitioners have approached various authorities to seek recovery of salary, gratuities, etc. They have also obtained some orders from those authorities. Therefore, it is not in dispute that the petitioner approaches this Adjudicating Authority in order to recover the alleged outstanding amount arises out of non-payment salary, gratuity, reimbursement of office imprest, reimbursement of fuel expenses and encashment of earned leave, etc. It is also to be noted that the respondent denied even engagement some of the petitioners in the company. Therefore, the petitioners have not established the alleged outstanding amount arises and various facts. It is settled position of law that the provisions of the Code cannot be invoked for recovery of outstanding alleged amount - The hon'ble Supreme Court in the case of Mobilox Innovations P. Ltd. v. Kirusa Software P. Ltd. 2017 (9) TMI 1270 - SUPREME COURT has inter alia, held that the IBC, 2016 is not intended to be substitute to a recovery forum. The petitioners not only failed to establish their claims beyond dispute but also failed to prove that the respondent-company is insolvent. And mere pendency of cases would not ipso facto prove that the company is insolvent. Moreover, it is stated by the respondent that several of cases have been settled and thus the company cannot be justified to put under the corporate insolvency resolution process (CIRP) as urged by the petitioners - the petitioner failed to make out any case so as to initiate corporate insolvency resolution process as prayed for and thus the instant company petition is liable to be dismissed by granting liberty to the petitioners to pursue other remedies available to them under any other law to recover the alleged claims made in the company petition. Petition dismissed.
Issues Involved:
1. Petition for winding up under Sections 433(e), (f), and 434 of the Companies Act, 1956. 2. Non-payment of salaries, gratuities, and other dues to employees. 3. Alleged insolvency of the respondent company. 4. Initiation of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. 5. Objections raised by the respondent regarding the claims and the applicability of the IBC. 6. Jurisdiction and limitation issues. Detailed Analysis: 1. Petition for Winding Up: The petitioners, employees of the respondent company, filed a petition under Sections 433(e), (f), and 434 of the Companies Act, 1956, seeking the winding up of M/s. MetroCorp Infrastructure Ltd. The case was transferred to the National Company Law Tribunal (NCLT) by the High Court of Karnataka. 2. Non-payment of Salaries, Gratuities, and Other Dues: The petitioners claimed that the respondent company stopped paying salaries and other dues from October 2010 to March 2014, accumulating a liability of ?1,78,25,555 towards salary, gratuity, and other expenses. Despite repeated demands, the company failed to clear these dues, leading to legal notices and petitions by the employees. 3. Alleged Insolvency of the Respondent Company: The petitioners argued that the company is unable to pay its debts, making it commercially insolvent. They sought the winding up of the company under the provisions of the Companies Act, 1956, and the initiation of the Corporate Insolvency Resolution Process (CIRP) under the IBC, 2016. 4. Initiation of CIRP Under IBC, 2016: The petitioners complied with the provisions of the IBC by issuing a demand notice and filing the prescribed application. They proposed the appointment of an Interim Resolution Professional (IRP) to oversee the CIRP, asserting that there was an admitted debt and default by the corporate debtor. 5. Objections Raised by the Respondent: The respondent denied the allegations, claiming that the petitioners had not approached the Tribunal with clean hands and had ulterior motives. They argued that the claims were barred by limitation and that the provisions of the Companies Act and IBC were not applicable as there was no "debt" owed to the petitioners. They also contended that most of the litigations were settled and the company was not insolvent. 6. Jurisdiction and Limitation Issues: The respondent contended that the claims were barred by limitation, as the alleged dues dated back to 2010 and the petition was filed in 2015. They argued that the petitioners' claims were stale and could not be entertained by the Tribunal. The Tribunal noted that the petitioners had approached various authorities for recovery of dues and obtained some orders, but failed to establish the alleged outstanding amounts and the insolvency of the company. Conclusion: The Tribunal concluded that the provisions of the IBC cannot be invoked for the recovery of outstanding amounts and that the petitioners failed to establish their claims beyond dispute. The Tribunal emphasized that the IBC is not a substitute for a recovery forum and that the existence of undisputed debt is essential for initiating CIRP. The Tribunal dismissed the petition, granting liberty to the petitioners to pursue other remedies available under any other law for recovering the alleged outstanding amounts.
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