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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 ..... nts by observing that if for delayed payment applicant(s) claim any interest, it well be open to them to move before a court of competent jurisdiction for recovery of interest, but initiation of Corporate Insolvency Resolution Process is not the answer. There is no merit in these Appeals - Appeal dismissed. - Company Appeal (AT) (Insolvency) Nos. 719, 721, 722, 723 & 728 of 2020 - - - Dated:- 18-8-2021 - [Justice Anant Bijay Singh] Member (Judicial) And [Ms. Shreesha Merla] Member (Technical) For the Appellant : Ms. Shrey Vardhan Rateria and Mr. Rahul Kumar, Advocates For the Respondent : Mr. Chandra Shekhar Gupta, Advocate JUDGMENT Justice Anant Bijay Singh ; INDEX A The Appeal. B The facts of these Appeals. C Submissions on behalf of the Appellants in Company Appeal (AT) (Insolvency) No. 719 of 2020, Company Appeal (AT) (Insolvency) No. 721 of 2020, Company Appeal (AT) (Insolvency) No. 722 of 2020, Company Appeal (AT) (Insolvency) No. 723 of 2020 and Company Appeal (AT) (Insolvency) No. 728 of 2020. D Submissions on behalf of the Respondent- Corporate Debtor . E Findings. F Order. A The Appeal 1. All these Appeals are aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )-703/ND/2019 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for short IBC) before NCLT, Delhi wherein the Appellant claimed the salary for the period of January 2013 to June 2013; May 2014 to September2014; April 2017 to September 2017, gratuity, interest @ of 18% from the date of default till realization of amount. Company Appeal (AT) (Insolvency) No. 721 of 2020 (Shally Sati Vs. M/s Karan Motors Pvt. Ltd.) 4. The Appellant- Shally Sati was employed with the Respondent- M/s Karan Motors Private Limited since 2013. 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 company since end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply 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 company since end of September 2017 and finally tendered her resignation on 22.10.2017. vi) That in order to recover the said outstanding amount the Appellant- Operational Creditor even sent a legal notice through his Counsel on 04.10.2017 despite that the Respondent did not release the said amount. vii) Thereafter, the Appellant-Operational Creditor filed Application bearing CP(IB)-706/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, gratuity, interest at the rate of 18% from the date of default till realization of amount. Company Appeal (AT) (Insolvency) No. 728 of 2020 (Asha Devi Vs. M/s Karan Motors Pvt. Ltd.) 7. The Appellant- Asha Devi was employed with the Respondent- M/s Karan Motors Private Limited since 2012. ii) In the year 2013, the Respondent without having reason skippe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State). To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings. We are exercising this power under Article 142 read with Article 141 of the Constitution of India and declare that this order is a binding order within the meaning of Article 141 on all Courts/Tribunals and authorities. This order may be brought to the notice of all High Courts for being communicated to all subordinate Courts/Tribunals within their respective jurisdiction. Issue notice to all the Registrars General of the High Courts, returnable in four weeks. 10. It is further submitted that in view of the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson 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 should be set aside and the Appeal should be allowed. Submissions on behalf of the Appellant in Company Appeal (AT) (Insolvency) No. 721 of 2020 (Shally Sati) 12. 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-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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (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 furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 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. 728 of 2020 (Asha Devi) 15. The Learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 and grant the interest to the Appellant. So based on these submissions the impugned order is set aside and the Appeal be allowed. D Submissions on behalf of the Respondent- Corporate Debtor 16. Learned Counsel for the Respondent during the course of argument, and also in its Written Submissions submitted that the present Appeals are time barred in terms of the provisions of Section 61(2) of the IBC as same are not filed within statutory period of 30 days from the date of impugned order i.e. 18.02.2020 and the time of 30 days was expired on 20.03.2020 but the Appeals were filed on 18.08.2020 after 174 days and after deducting 30 days time there is delay of 144 days in filing the present Appeals. 17. It is further submitted that proviso of Section 61 of the IBC gives the power to NCLAT to condone the delay, if the Appeal is filed beyond 30 days further only period of 15 days will be given, but here the Appeals have been filed after delay of 129 days and no Interlocutory Application has been filed for condonation of delay. 18. Learned Counsel for the Respondent in Company Appeal (AT) (Insolvency) No. 719 of 2020 further submitted that the claims of the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery of dues which is a time barred claim. iv) 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. v) It is further submitted that the Appellant without permission, authorization and intimation remained absent 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. 20. Learned Counsel for the Respondent in Company Appeal (AT) (Insolvency) No. 722 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 ₹ 1,45,476/- (admitted amount) during proceedings b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 1,83,912/- 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- Corporate Debtor In-charge of production in the Foundry. He indulged in the activities, deliberately and intentionally to cause losses suffered by the Corporate Debtor with respect to quality and loss of business of several lacs besides loss of reputation in international market. The Corporate Debtor actually suffered substantial losses and damages on account of quality and timely completion of delivery schedule. vi) It is further submitted that the Appellant had earlier caused notice dated 04.10.2017 which was replied by the Corporate Debtor vide dated 09.10.2017 disputing claim by the Appellant stating nothing due and payable besides cautioning that the Appellant will b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss on account of rejection of goods produced to the Respondent. As a matter of fact, on account of misrepresentation and fraud, the Respondent company wanted to file criminal case against the Appellant but her husband sought mercy and sympathy, hence the respondent did not pursue criminal proceedings. The Corporate Debtor actually suffered substantial losses and damages of ₹ 31,33,992.50. vi) It is further submitted that the Appellant without permission, authorization and intimation remained absent 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. 23. It is further submitted that the petition under Section 9 of the IBC is against the main objective of IBC which is maximization of value of assets. It is well settled that the IBC proceedings are not the recovery proceedings. In these present Appeals, the Appellants have filed the Applications for recovery of time barred claim. 24. It is further submitted that the Hon ble Supreme Court in the case of Mobilox Innovations (P) Ltd. Vs. Kirusa Software (P) Ltd. 2018 (1) SCC 353 in paragraph 34 has held that that the Insolve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred; 5(21) Operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority; The Appellants have filed Applications under Section 9 of the IBC before the Adjudication Authority. From the perusal of the record it appears that in Company Appeal (AT) (Insolvency) No. 719 of 2020 Appellant had sent the demand notice under Section 8 of the IBC which is contained in page 62 to 64 of the Appeal Paper Book and in Company Appeal (AT) (Insolvency) No. 723 of 2020 Appellant had also sent the demand notice under Section 8 of the IBC which is contained in page 62 to 64 of the Appeal Paper Book. In remained Appeals, i.e. Company Appeal (AT) (Insolvency) No. 721 of 2020, Company Appeal (AT) (Insolvency) No. 722 of 2020 and Company Appeal (AT) (Insolvency) No. 728 of 2020 Appellants have not sent the demand notice under Section 8 of the IBC and straigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant rather it has been mentioned that claim of total interest of ₹ 4,65,355/- 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. 728 of 2020 at Annexure A/2 (page 46 to 82 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 ₹ 4,22,447/- and interest @ 18% from 14.02.2019 till the realisation of outstanding amount. In the recent judgment of Hon ble Supreme Court passed in Civil Appeal No. 676 of 2021 [Pratap Technocrats (P) Ltd. Ors. Vs. Monitoring Committee of Reliance Infratel Limited Anr.] dated 10.08.2021 where Hon ble Supreme Court has held in paragraph 22 as under: 22 The resolution plan was approved by the CoC, in compliance with the provisions of the IBC. The jurisdiction of the Adjudicating Authority under Section 31(1) is to determine whether the resolution plan, as approved by the CoC, complies with the req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(h), 2(g), 8, 13, 15(c) and (d) Interpretation of Statutes Subsidiary Rules Noscitur a sociis Application of principle of to S. 3(23)(g) of Insolvency and Bankruptcy Code, 2016 (Paras 12 to 17) The question decided by the Hon ble Supreme Court was whether the collective application on behalf of the workman can be filed by the trade union. The Hon ble Supreme Court answered the question in the above judgment as to whether trade union fall within the definition of person under Section 3(23) of the IBC. In the instant case this question does not arise in much as all the Appellants herein have invoked independently the provisions of Section 9 of the IBC. It is also an admitted fact that in all these Appeals, the Appellants have failed to show any document to establish that the Respondent has acknowledged the dues of salary, gratuity etc. from 2014 onwards. Considering all these facts and provisions of the law, we are of the considered view that there is no illegality in the impugned orders. The Ld. Adjudicating Authority have rightly dismissed the Applications under Section 9 of the IBC filed by the Appellants by observing that if for delayed payment applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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