2022 (2) TMI 417 - Tri - Insolvency and Bankruptcy

Maintainability 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 seen from the records that the applicant was relieved from its services w.e.f. 01.11.2018. From bare perusal of the relieving certificate it is revealed that there was no dispute pending between the applicant and the Corporate Debtor. The Corporate Debtor has not placed any documents establishing the fact that the applicant has breached the terms of its employment agreement. Mere allegation without any supporting evidence would not help the Corporate Debtor - As far as the loan taken by the applicant is concerned the applicant has already adjusted that amount from salary dues claimed in demand notice. The corporate debtor has failed to establish the fact that there is any pre-existing dispute between the parties. The Corporate debtor has also failed to prove that the salary dues are not payable to applicant or has already been paid off. It is clearly established that the default in payment of the operational debt has occurred by the corporate debtor - it can be concluded that the applicant has established its claim which is due and payable by the corporate debtor. The present application is admitted - Moratorium is declared.

Summary

Issues:
- Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
- Allegations of non-payment of salary and employment dues against the Corporate Debtor.
- Objections raised by the Corporate Debtor regarding alleged deficiencies in services and loan repayment.
- Examination of documents and submissions by the Tribunal.
- Analysis of dispute and default in payment of operational debt.
- Appointment of Insolvency Resolution Professional and directions for depositing funds.
- Imposition of moratorium as per the provisions of the Insolvency and Bankruptcy Code.

Analysis:
The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process against the Corporate Debtor due to non-payment of salary and employment dues. The applicant alleged non-payment for seven months and issued a Demand Notice in compliance with the Code. The Corporate Debtor raised objections, citing deficiencies in services and loan repayment by the applicant, supported by attendance sheets and balance sheet. The Tribunal examined the documents and submissions presented by both parties.

Upon review, the Tribunal found that the applicant was relieved from services without any pending dispute as per the relieving certificate. The Corporate Debtor failed to provide evidence of breach of employment terms or non-payment of salary dues. The Tribunal noted that the applicant had adjusted the loan amount from the salary dues claimed in the Demand Notice. It concluded that the default in payment of operational debt by the Corporate Debtor was established, dismissing the Corporate Debtor's dispute as unsubstantiated.

Citing the "Mobilox Innovative Private Limited vs. Kirusa Software Private Limited" case, the Tribunal emphasized the need for a genuine dispute to reject the application. In this case, the Tribunal found the applicant's claim to be valid and admitted the application. The Tribunal appointed an Insolvency Resolution Professional and directed the applicant to deposit funds for the process. A moratorium was imposed as per the provisions of the Insolvency and Bankruptcy Code, with specific directions for communication and compliance with regulatory authorities.

In conclusion, the Tribunal upheld the applicant's claim, appointed an Insolvency Resolution Professional, and imposed a moratorium on the Corporate Debtor as per the Code's provisions. The detailed analysis considered the evidence presented, dismissed the Corporate Debtor's objections, and ensured compliance with the legal requirements for initiating the Corporate Insolvency Resolution Process.