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2021 (4) TMI 1142 - 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 - HELD THAT - It is not in dispute that applicant was serving as General Manager of the Corporate Debtor. This fact is further supported by Form-16 issued under the provisions of Income Tax Act, 1961 which confirm the quantum of salary. It is also not in dispute that reply to notice of demand issued under Section 8 of IBC, 2016 has not been given. Such notice has been delivered and notice to that effect has been put on record, hence, for this reason alone this application can be admitted. Further the debt is due and payable because it is not barred by limitation nor it is premature. No dispute prior to issue of notice under Section 8 of IBC, 2016 exists as evident from the material on record. A default has occurred in payment thereof. The outstanding amount is more than ₹ 1,00,000/-, being threshold limited to admit the petition filed under Section 9 of IBC, 2016. Application admitted - moratorium declared.
Issues:
1. Application filed under Section 9 of IBC, 2016 for initiation of CIRP against the Corporate Debtor. 2. Admittance of the application based on unpaid salary dues and non-response to notice under Section 8 of IBC, 2016. 3. Appointment of an IRP and declaration of moratorium under Section 14(1) of the Code. 4. Directions regarding the conduct of Corporate Insolvency Resolution Process (CIRP) and obligations of the IRP. Analysis: 1. The application was filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 by an ex-employee seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to unpaid salary dues amounting to &8377; 2,20,821. The applicant was a General Manager of the Corporate Debtor and had not received his salary despite several reminders. The application was supported by the fact that notice under Section 8 of IBC, 2016 was served on the Corporate Debtor without any response, making the application admissible. 2. The Tribunal found that the applicant's claim was valid as the unpaid salary was not disputed, and it was confirmed through Form-16 issued under the Income Tax Act, 1961. The non-response to the notice under Section 8 of IBC, 2016 further strengthened the case for admitting the application. The outstanding amount was above the threshold for admitting a petition under Section 9 of IBC, 2016, and there was no dispute regarding the debt prior to the notice, establishing a default in payment. 3. The Tribunal decided to admit the application and declared a moratorium under Section 14(1) of the Code, prohibiting various actions against the Corporate Debtor. An Interim Resolution Professional (IRP) was appointed from the list approved by IBBI. The IRP was tasked with performing functions as per the Code, and all personnel associated with the Corporate Debtor were directed to cooperate with the IRP. The IRP was also instructed to make a public announcement of the CIRP and manage the operations of the Corporate Debtor during the process. 4. Additionally, the Tribunal directed the IRP to protect the value of the Corporate Debtor's property, manage its operations as a going concern, and ensure the continuity of the supply of goods/services during the moratorium period. The Operational Creditor was required to provide an advance to the IRP for the smooth conduct of the CIRP. The Registry was instructed to communicate the order to relevant parties and upload it on the website. The application was allowed, and the case was disposed of accordingly.
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