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TMI Blog2019 (11) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... t to substantiate its contention that it is solvent Company and its net worth is positive. Law provide protection to genuine Companies from misusing provisions of the Code by un-scrupulous elements. Therefore, provisions of Code and the rules made thereunder, mandate Operational Creditors to cause statutory demand notice to Corporate Debtor so as to put their defence by way of reply. In the instant case, as stated supra, the basic facts of employment of Petitioner in the Company is not dispute and the Respondents has not produced any evidence to show that the claims of Petitioner is settled prior/post issue of Demand notice. Moreover, they have started raising frivolous defences in the instant case, when notice was given to them. All the post allegations like service of petitioner was poor, not contributed for the welfare of the Company etc. are afterthoughts. As stated supra, it is not case of Respondent that services of Petitioner was terminated but he himself has voluntarily resigned. The Contention of the Respondent that the case is barred by latches and limitation is not borne by facts of case, and the debt and default in question is admittedly not in dispute. The Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esigned for the post on 08.04.2015, which was accepted, and thus he was relieved from the employment at closing hours of 10.06.2015, vide certificate dated 07.07.2015. He had worked in the office of Corporate Debtor from 03.10.2008 to 10.06.2015. However, his dues were not settled. The Petitioner started sending several emails by asking the Respondent to settle his pending salary and other settlement benefits. Ultimately, Shri Sanjay / Shri H. S. Raghava have issued a statement of dues vide email dated 11.01.2017 by certifying total dues as ₹ 58,68,768/- towards LTA, Bonus, leave encashment, salary etc. fell due from the date of appointment i.e. 03.10.2008 till the date of his relieving from the Employment. (3) However, the Respondent in their statement of objection dated 07.05.2019, denied their liability to clear the dues by raising moonshine defense and there was no single document filed in support of its defense. The Petitioner has produced a certified copy of the Order passed by the Hon'ble High Court of Karnataka in CoP No. 55/2011 in which 16 former employees of the Respondent Company, similar to the Petitioner, were compelled to file Petition seeking to winding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor does not owe any debt whatsoever to the Petitioner. In fact, there is no debt much less an operational debt owed to the so called Operational Creditor. Such being the case, there is no question of Corporate Debtor having defaulted in paying the debt that has become due and payable but not repaid to the Operational Creditor. It is contented that, as per Section 6 of the Code, only when a Corporate Debtor defaults in paying a debt that has become due and payable but not repaid, CIRP, under Part II of the Code may be initiated by the Petitioner against the Respondent. The same being applicable to be present case, the application filed by the Operational Creditor is liable to be rejected. (3) It is stated that the claims of the Petitioner for recovery of monies alleged to be unpaid Operational Debts is seriously disputed by the Respondent. The Respondent is a solvent and profit making Company. The Respondent has been in the business of constructing residential apartments and development of properties for several years and has built up a reputation in the market. The net worth of the Company is positive and the Corporate Debtor is possessed of several assets, and is fully cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and as on 01.08.2016 Mr. H.S. Raghava was also not working in employment with the Respondent. Such being the case, the alleged e-mails dated 11.01.2017 and 22.12.2016 along with alleged attachments of a tabular from claimed to have sent by the Respondent are all cooked up and created only for the purpose of the present case. It is alleged that Mr. Sanjay and Mr. H.S. Raghava have misused the Company e-mail account only to stealthily aid the Petitioner. In fact, Mr. Sanjay and Mr. H.S. Raghava have joined hands with the Petitioner and all the three have hatched a conspiracy against the Corporate Debtor with an intention to make unlawful gain at cost and expense of the Corporate Debtor. (6) It is stated that from a bare perusal of the alleged tabular sheet produced by the Petitioner, it can be seen that the Operational Creditor is basing his claim for ₹ 58,68,768/- under three heads, firstly, LTA (Leave Travel Allowance) @ 8.33% of the basic, secondly, Bonus @ 10% of Gross and thirdly, leave encashment for the period 03.10.2008 till 10.06.2015. Assuming for a moment but not conceding that the Petitioner is entitled to the aforesaid amounts, it is surprising as to why the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26.10.2017 by praying to the Adjudicating Authority to permit him to withdraw the Company Petition with a liberty to file fresh Company Petition in the interest of justice and equity. Accordingly, the Adjudicating Authority passed an order dated 26.10.2017 by granting permission to withdraw the case with a liberty to file fresh Company Petition. Therefore, the present Company Petition is filed duly following the prescribed procedure under the provisions of the Code. Therefore, the contentions made by the Respondent contrary to it are not tenable. 7. As stated supra, the working of Petitioner in Respondent Company during 03.10.2008 to 10.06.2015 is not in dispute. The certificate dated 07.07.2015 issued by Managing Director of the Respondent, did not say anything with regard to settlement of dues. It is relevant to extract email dated 20th August, 2015, which reads as under: Dear Sir, I would like to bring to your kind information that the following amount is pending for the service done in your esteemed organization from 03.10.2008 to 10.06.2015 details are as below. a. Till 31.03.2013 as discussed and reconciliation done by Mr. Raghava (including leave encashment up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and his brother Shri Deeraj Prabhu for cheating home buyers, vendors, Land owners, Banks, Employee etc. 9. In pursuant to the said memo dated 25.10.2019, the Corporate Debtor has filed Objections dated 13.11.2019 by inter alia contending as follows: (1) The Corporate Debtor is a Private Limited Company registered under the Companies Act, 1956, and is a reputed Company in the field of construction and development of residential projects in the city of Bangalore. The Corporate Debtor has complete construction and handed over possession of more than 4500 apartments/flats in the city of Bangalore. The Corporate Debtor is a solvent Company and is capable of discharging all its debts. (2) It is stated that the Operational Creditor has filed a joint memo alleging that 278 cases are pending against the Operational Creditor for deficiency of service before District Consumer Forum, State Consumer Forum and National Consumer Dispute Redressal Commission. Appeals in SI. No. 1 to 48 of the joint memo are the Appeals which are filed by the Corporate Debtor and these Appeals are pending consideration before the Hon'ble State Commission of Karnataka. Appeals in SI. No. 49 to 61 are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is certified that there is no credit entry of ₹ 58,58,768/ in the Account of Petitioner/s SB A/c 05231141204915 during period 09.11.2017 to 13.12.2017. Moreover, the defence raised in the statement of objections are not all tenable and they are liable to be rejected. Another C.P. (IB) No. 43/BB/2018 is pending against the Corporate Debtor. Since there is no dispute raised with regard to the outstanding amount in question and it default, and Corporate Debtor claimed that it is solvent Company, the Adjudicating Authority has granted sufficient time to resolve/settle the issue raised in the instant Company petition, in the light of several cases pending against it. However, the Respondent failed to avail the opportunity given by the Adjudicating Authority, even though several adjournment have been granted to them right from 2017 till date and thus there is no other alternative for us except to consider the matter as per its merits and pass appropriate orders. It is not in dispute that the Respondent is facing several cases filed by Homebuyers/vendors etc. As stated supra, the Respondent has not filed any single document to substantiate its contentions raised in it. It has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re convinced that there is a debt and default in question, which is not in dispute and thus it is fit case to admit by initiating CIRP in respect of Corporate Debtor. 03.09.2019, who is eligible to be appointed as IRP. It is settled position of law that once debt and default in question is proved, and there being no dispute raised by the Corporate Debtor, in an Application /Petition filed U/s 9 of Code, it is mandatory for the Adjudicating Authority to initiate CIRP, appoint IRP, impose moratorium etc. Therefore, we are convinced that there is a debt and default in question, which is not in dispute and thus it is fit case to admit by initiating CIRP in respect of Corporate Debtor. 12. In view of the above facts and circumstances of the case and the law on the issue, by exercising powers conferred on the Adjudicating Authority, U/s 9(5)(i) of the Code, the Company petition bearing C.P. (IB) No. 159/BB/2017 is hereby admitted by initiating Corporate Insolvency Resolution Process (CIRP) in respect of Respondent/Corporate Debtor with the following consequential directions: 1) Mr. S. Viswanathan, bearing Registration No. IBBI/IPA-001/IP-P00538/2017-18/10963, who is qualified Resol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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