9911796707
TMI Blog2023 (1) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... s no profits or its profits are inadequate, makes the position abundantly clear that the ₹ 2nd Respondent / Company, intended to pay Rs. 60,00,000/- p.a., to the ₹ 1st Respondent, without any conditionality, and was minimum payment per annum, even when the Company did not earn any Profit during the year. These Resolutions are, therefore, crystal clear and leave no ambiguity, in establishing the fact, that the Appellant s contention that, it was only ₹ 50% of the salary payment fixed to be paid, and the remaining 50% of the salary, as variable salary linked to his performance, is untenable and this fact is also corroborated from Form MR1, filed with RoC, where also Rs.60,00,000/-, has been indicated as minimum remunerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, Hyderabad Bench), whereby, the Adjudicating Authority admitted application filed under Section 9 of the Insolvency Bankruptcy Code, 2016 (in short I B Code, 2016). Brief Facts Of The Case Submissions by the Appellant 1st Respondent :- 2. Mr. Sadhanala Venkata Rao is 1st Respondent who was appointed as Additional Director- Executive Category and Chief Executive Officer in the 2nd Respondent Company ( Corporate Debtor ) vide two board resolutions both dated 05.01.2018. The 2nd Respondent Company agreed to pay Rs. 60 lakhs per annum as salary to the 1st Respondent and Form No. MR1 was filed with the Registrar of Company recording the appointment and remuneration of the 1st Respondent as Key Managerial Personnel. The 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Performance Indicators ( KPI ) which were not achieved by the 1st Respondent. 6. The Learned Counsel for the Appellant denied claim of 1st Respondent in the Reply to the 1st Respondent on 10.06.2021. 7. The Learned Counsel for the Appellant stated that Rs. 89,00,000/- as fixed salary was paid from 04.01.2018 to 08.01.2021. However, the 1 st Respondent has claimed for further salary of Rs. 94,25,000/- as variable salary. The Learned Counsel for the Appellant stated that this variable salary was subject to meeting Key Performance Indicators by the 1st Respondent and was not payable. The Learned Counsel for the Appellant further mentioned about pre-existing dispute between the 1st Respondent and the 2nd Respondent. 8. The Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Respondent and for non payment of his dues. 12. The Learned Counsel for the 1st Respondent mentioned that during his term the Chief Executive Officer there was healthy Earning Before Interest, Taxes, Depreciation and Amortization ( EBITDA ) of the 2nd Respondent i.e. Corporate Debtor was at 27%-31% during the 1st Respondent tenure. The Learned Counsel for the 1st Respondent further mentioned that in the Board Resolution for his appointment nowhere the condition of his pay linking to his performance was mentioned and alleged that the impression of variable pay linked to Key Performance Indicators has been created only to deny his dues. 13. The Learned Counsel for the 1st Respondent therefore urged this Appellate Tribunal to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ala Venkata Rao Resignation as Chief Financial Officer January 05, 2018 4. Mr. Sadhanala Venkata Rao Appointment as CEO January 05, 2018 16. This Appellate Tribunal further observes from the Balance Sheet as on 31.03.2018 where the remuneration of the 1st Respondent Chief Executive Officer has been stated as Rs. 60,00,000/- with the clarification that has approved by the Shareholders in EGM . 17. From the Demand Notice issued under Section 8 of the I Code, 2016 dated 11.05.2021, this Appellate Tribunal observe the break up provided of the outstanding of Rs. 1,01,15,000/- till 08.01.2021 as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt per annum , even when the `Company did not earn any Profit during the year . These `Resolutions are, therefore, crystal clear and leave `no ambiguity , in establishing the fact, that the Appellant s contention that, it was only ₹ 50% of the salary payment fixed to be paid , and the `remaining 50% of the salary, as `variable salary linked to his performance , is untenable and this fact is also corroborated from `Form MR1 , filed with `RoC , where also Rs.60,00,000/-, has been indicated as `minimum remuneration , payable to the ₹ 1st Respondent , in any Financial Year, during the tenure even when the ₹ 2nd Respondent / Company , does not have any profit. 21. This Appellate Tribunal also observed that proper demand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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