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TMI Blog2021 (8) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... e common order dated 18.02.2020 passed by the Adjudicating Authority (National Company Law tribunal), New Delhi Bench-V, whereby the Ld. Adjudicating Authority has passed following orders: "XXIV. For the reasons discussed above, we are of the considered view that since the admitted principal amount has already been paid by the Corporate Debtor, therefore there is no occurrence of default and no debt is due. Hence, all the present applications are not liable to be accepted. Accordingly, all the present applications- IB-702/ND/2019, IB-706/ND/2019, IB-703/ND/2019, IB-743/ND/2019 and IB-705/ND/2019 are hereby dismissed. However, we hereby permit all the Operational Creditors/Petitioners to get the cheques of admitted principal amount from the office of Registrar, NCLT, New Delhi where Corporate Debtor has deposited the same." 2. All these Appeals were heard together and disposed of by common judgment. B The Facts of these Appeals The facts giving rise to these Appeals are under: Company Appeal (AT) (Insolvency) No. 719 of 2020 (Ranjeet Singh Vs. M/s Karan Motors Pvt. Ltd.) 3. The Appellant- 'Ranjeet Singh' was employed with the Respondent- 'M/s Karan Motors Private Limited' si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. vi) Thereafter, the Appellant-Operational Creditor filed Application bearing CP(IB)-702/ND/2019 under Section 9 of the Insolvency and Bankruptcy Code, 2016 before NCLT, Delhi wherein the Appellant claimed the salary for the period of May 2014 to September 2014; April 2017 to September 2017, interest @ of 18% from the date of default till realization of amount. Company Appeal (AT) (Insolvency) No. 722 of 2020 (Deepa Sati Vs. M/s Karan Motors Pvt. Ltd.) 5. The Appellant- 'Deepa Sati' was employed with the Respondent- 'M/s Karan Motors Private Limited' since 2011. ii) In the year 2014, the Respondent without having reason skipped the salary of the Appellant for the period May 2014 to September 2014. iii) Further case is that in the year 2017 the Respondent again failed to pay the salary for the period of April 2017 to September 2017. iv) Since June 2014, the Appellant has been requesting the Respondent to clear the outstanding salary but the Respondent simply kept on shirking away from its obligations on the pretext of one excuse or the other. v) Due to non-payment of salary the Appellant started facing financial hardship and therefore stopped going to the Respondent c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent did not pay the salary of the Appellant for the period May 2014 to September 2014. iv) In the year 2017, the Respondent again failed to pay the salary for the period of April 2017 to September 2017. v) Since February 2013, the Appellant has been requesting the Respondent to clear the outstanding salary but the Respondent simply kept on shirking away from its obligations on the pretext of one excuse or the other. vi) Due to non-payment of salary the Appellant started facing financial hardship and therefore stopped going to the Respondent company since end of September 2017 and finally tendered her resignation on 03.10.2018. vii) Thereafter, the Appellant-Operational Creditor filed Application bearing CP(IB)-743/ND/2019 filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 before NCLT, Delhi wherein the Appellant claimed the salary for the period of January 2013 to June 2013; May 2014 to September 2014; April 2017 to September 2017, gratuity, interest at the rate of 18% from the date of default till realization of amount. 8. The Ld. Adjudicating Authority after hearing the parties passed the common order on 18.02.2020 and dismissed all the Applications f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation. 11. The Learned Counsel for the Appellant during the course of oral argument and in his Written Submissions and also in Additional Written Submissions has stated that the Ld. Adjudicating Authority while passing the impugned order overlooked the claim of salary for the month of January 2013 to June 2013; May 2014 to September 2014. ii) It is further submitted that the non-payment of salary is recurring cause of action and relied upon a judgment passed by Hon'ble High Court of Himachal Pradesh in CWP-2411/2019 (Jagdish Chand Vs State of Himachal Pradesh & Ors.) wherein Hon'ble High Court, while deciding bunch of petitions, viewed that non-payment of salary is recurring cause of action and hence cannot be time barred. iii) It is further submitted that the Ld. Adjudicating Authority have erred holding that in absence of any claim between the parties the Appellant cannot claim interest at the rate of 18%. Further referred to Section 3(11) of the IBC definition have been given in the IBC "a liability or obligation in respect of claim which is due from any person..." iv) It is further submitted that the Ld. Adjudicating Authority has failed to consider gratuity and salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he IBC definition have been given in the IBC "a liability or obligation in respect of claim which is due from any person..." iv) It is further submitted that the Ld. Adjudicating Authority has failed to consider that gratuity and salary falls within this definition but this aspects of the matter not considered by the Ld. Adjudicating Authority. v) It is further submitted that the Hon'ble Supreme Court in the case of "JK Jute Mill Mazdoor Morcha Vs Juggilal Kamlapat Jute Mills Company 2019 (11) SCC 332" wherein viewed that if workmen have not been paid their wages and/or salary by company, they would certainly be a creditor. This judgment was also not considered by the Ld. Adjudicating Authority, so the impugned order is fit to be set aside. vi) It is further submitted that the Section 2 (a) of the Interest Act, 1978 says "Court" includes a tribunal and an arbitrator" further Section 3 of the Act stipulates the power of Court to allow interest in Section 3 of the Act reads as follow: "3. Power of Court to allow interest- i). In any proceedings for recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act reads as follow: "3. Power of Court to allow interest- i). In any proceedings for recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages..." vii) It is further submitted that the Courts, Appellate Tribunal can also invoke its inherent power as enshrined in Rule 11 of the NCLAT Rules 2016 and grant the interest to the Appellant. So based on these submissions the impugned order is set aside and the Appeal be allowed. Submissions on behalf of the Appellant in Company Appeal (AT) (Insolvency) No. 723 of 2020 (Hansa Dutt Sati) 14. The Learned Counsel for the Appellant during the course of oral argument and his Written Submissions as also Additional Written Submissions have stated that the Ld. Adjudicating Authority while passing the impugned order overlooked the claim of salary for the month of May 2014 to September 2014. ii) It is further submitted that the non-payment of salary is recurring cause of action and relied upon a judgment passed by Hon'ble High Court of Himachal Pradesh in CWP- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lary for the month of January 2013 to June 2013; May 2014 to September 2014. ii) It is further submitted that the non-payment of salary is recurring cause of action and relied upon a judgment passed by Hon'ble High Court of Himachal Pradesh in CWP-2411/2019 (Jagdish Chand Vs State of Himachal Pradesh & Ors.) wherein Hon'ble High Court, while deciding bunch of petitions, viewed that non-payment of salary is recurring cause of action and hence cannot be time barred. iii) It is further submitted that the Ld. Adjudicating Authority have erred holding that in absence of any claim between the parties the Appellant cannot claim of interest at the rate of 18%. Further referred to Section 3(11) of the IBC definition have been given in the IBC "a liability or obligation in respect of claim which is due from any person..." iv) It is further submitted that the Ld. Adjudicating Authority has failed to consider that gratuity and salary falls within this definition but this aspects of the matter not considered by the Ld. Adjudicating Authority. v) It is further submitted that the Hon'ble Supreme Court in the case of "JK Jute Mill Mazdoor Morcha Vs Juggilal Kamlapat Jute Mills Company 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r' has already made payment of Rs. 4,02,166/- (admitted amount) during proceedings before the Adjudicating Authority which is duly accepted and acknowledged by the Appellant and rest of the claim (claim and interest) of Rs. 18,91,343/- is time barred and rightly rejected by the Ld. Adjudicating Authority. iii) It is further submitted that IBC cannot be a way for recovery of dues which is a time barred claim. iv) It is further submitted that the claim of Gratuity of Rs. 2,57,942/- is also not due and payable. The claim for gratuity can be decided by the Competent Authority under the Gratuity Act for which the Appellant has not approached the appropriate authority. v) It is further submitted that the Appellant was employed with the Respondent as in-charge of production in the Machine Shop and during employment Appellant indulged in the activities which shows that Appellant deliberately and intentionally caused losses to the Corporate Debtor and suffered by the Corporate Debtor towards quality, loss of business of several lacs besides loss of reputation in international market. The Respondent - Corporate Debtor actually suffered substantial losses and damages of Rs. 31,33,992.50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that IBC cannot be a way for recovery of dues which is a time barred claim. iv) It is further submitted that the claim of Gratuity of Rs. 53,654/- is also not due and payable. The claim for gratuity can be decided by the Competent Authority under the Gratuity Act for which the Appellant has not approached the appropriate authority. v) it is further submitted that the Appellant is daughter of Mr. Hansa Dutt Sati (Appellant in Appel No. 723 of 2020) who was In-Charge of production in the Foundry. The said Mr. Hansa Dutt Sati (father) falsely represented that the Appellant is properly qualified and competent to work as designer and thus by using his influence and position, got the Appellant appointed on salary higher than in usual course, whereas the present appellant was not deserving. vi) It is further submitted that the Appellant was not attending office but her father by misusing his position, malafidely shown her as working and thus kept on drawing salary for which the Appellant did not work. That due to negligence and wrong workings by her father, it caused loss of business of several lacs besides loss of reputation in international market. The Respondent-'Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.e.f. 23.09.2017 without giving charge to any other person and has caused loss of production, quality, defects and delay in deliveries and losses. 22. Learned Counsel for the Respondent in Company Appeal (AT) (Insolvency) No. 728 of 2020 further submitted that the claims of the Appellant are time barred and disputed. The Appellant had made following claims before the Adjudicating Authority are hereunder: ii) It is further submitted that the Respondent - 'Corporate Debtor' has already made payment of Rs. 1,65,880/- (admitted amount) during proceedings before the Adjudicating Authority which is duly accepted and acknowledge by the Appellant and rest of the claim (claim and interest) of Rs. 7,47,276/- is time barred and rightly rejected by the Ld. Adjudicating Authority. iii) It is further submitted that IBC cannot be a way for recovery of dues which is a time barred claim. iv) It is further submitted that the claim of Gratuity of Rs. 45,029/- is also not due and payable. The claim for gratuity can be decided by the Competent Authority under the Gratuity Act for which the Appellant has not approached the appropriate authority. v) It is further submitted that the Appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt", Operational Debt, "due" and "payable" in favour of the Appellant as defined under the IBC, 2016. The claim of the period May 2014 to September2014 and interest claim thereon are clearly time barred. The Learned Counsel for the Respondent relied on the judgment of Swiss Ribbon Pvt. Ltd. Vs. UOI 2019 (4) SCC 17 in paragraph 64 of the judgment wherein the Hon'ble Supreme Court held that the "date of default is relevant and not cause of action." 26. Learned Counsel for the Appellant further submitted that based on these submissions there is no merit in these Appeals, therefore, these Appeals are fit to be dismissed. E FINDINGS 27. After hearing the Learned Counsel for the parties and perusing the records of these Appeals and considering the arguments advanced on behalf of the parties and going through the written submissions and also Additional Written Submissions filed on behalf of Appellants and Respondent. We are of the view that so far as the question of limitation of all these Appeals being hit by limitation is concerned that in view of order dated 23.03.2020 passed by Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No(s). 3 of 2020 "in re -cognizance for exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso at paragraph 5 of M/s Krystal Integrated Services Pvt. Ltd. Vs. M/s Indiaontime Express Pvt. Ltd. [Company Appeal (AT) (Insolvency) No. 194 of 2019] . From the perusal of the record in Company Appeal (AT) (Insolvency) No. 719 of 2020 at Annexure -A/2 (page 46 to 97 of the Appeal Paper Book) at page 56 wherein Part-IV of the Application at Sl. No. 2 which deals with amount claimed to be in default and the date on which the default occurred, no specific date has been mentioned by the Appellant rather it has been mentioned that claim of total interest of Rs. 10,02,701/- and interest @ 18% from 14.02.2019 till the realisation of outstanding amount. From the perusal of the record in Company Appeal (AT) (Insolvency) No. 721 of 2020 at Annexure -A/2 (page 44 to 77 of the Appeal Paper Book) at page 54 wherein Part-IV of the Application at Sl. No. 2 which deals with amount claimed to be in default and the date on which the default occurred, no specific date has been mentioned by the Appellant rather it has been mentioned that claim of total interest of Rs. 1,64,421/- and interest @ 18% from 14.02.2019 till the realisation of outstanding amount. From the perusal of the record in Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bound by the provisions of the IBC while adjudicating the matters under IBC. The judgment relied by the Learned Counsel for the Appellant regarding arrears of salary to be continuing cause of action as held by the Hon'ble Himachal Pradesh High Court (supra), being a constitutional Court have equity jurisdiction and the ratio of the judgment cannot be followed by statutory Tribunal both NCLT and NCLAT which ratio could not be followed with due reference while deciding the claim under IBC. So far as, reliance placed by the Learned Counsel for the Appellant in in the case of "JK Jute Mill Mazdoor Morcha Vs Juggilal Kamlapat Jute Mills Company 2019 (11) SCC 332" is not applicable in these Appeals in much as here the Appellants moved before the Adjudicating Authority in individual capacity and they have preferred these Appeals in individual capacity also. In this judgment Hon'ble Supreme Court has held as under: "Held, a trade union is certainly an entity established under a statute, in the sense of being governed by the Trade Unions Act, and would therefore fall within the definition of "person" under S. 3(23) of the Code - Thus, an "operational debt", meaning a claim in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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