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TMI Blog2023 (9) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... Directors with immediate effect. The Resolution Professional shall however be paid his fees/expenses by the Operational Creditor. The Impugned Judgement passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court-I) cannot be sustained in the eye of law - Appeal allowed. - [ Justice Anant Bijay Singh ] Member ( Judicial ) And [ Mr. Naresh Salecha ] Member ( Technical ) For the Appellants: Mr. Abjijeet Sinha, Mr. Sohan Kinkhafwala, Mr. Utsav Trivedi, Ms. Shivani Bhushan, Ms. Manini Roy, Ms. Heena Kochar Ms. Kanjani Sharma, Advocates. For the Respondent No. 1: Mr. Rishabh Tripathi, Mr. D.S. Mehta Mr. Jaivijay Thakur, Advocates for R-1. JUDGEMENT [ Anant Bijay Singh ( J ) ] 1. The instant Appeal bearing Comp. App. (AT) (Ins.) No.1239/2022 has been preferred by the Appellant `Mr. Satish Chinnadurai , who is aggrieved and dissatisfied by the Order dated 23.09.2022, passed by the Learned Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court I), filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as `The Code ), whereby and whereunder the Company Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resident, Vice President, CEO) and D.B. Group India Pvt. Lid (General Manager) violates directly or indirectly the obligations contained in this Agreement, defaulting amount received for a one year employment period in consideration of the execution of this Agreement, for a total amount of 400.000 INR. The Company and you also reserves the right to obtain additional damages and injunctive relief. 2 (i) Salary will be paid every month along with other employees till March 21st 2018, and Full Final and Gratuity payments will be done within 30 days from March 21st, 2018. viii. On 17.06.2018, the Respondent No. 1 addressed an email to the Corporate Debtor alleging non-payment of Rs. 1,50,000 towards the Notice of discharge and the gross amount of Rs. 1,50,000 in consideration of the execution of the NDA, which were the subject matter of the Application filed before the Adjudicating Authority. This email was controverted and disputed by the Corporate Debtor on immediate next day vide its email dated 18.06.2018 inter alia stating that no amounts were payable to Respondent No. 1. In the said email, the Corporate Debtor through Appellant, categorically and explicitly stated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor, to which the Respondent No. 1 was not entitled to. Counsel for the Appellant has placed on record the correspondence exchanged between Respondent No. 1 and the Corporate Debtor, between January 2008 and 17.06.2018. xiii. On 14.07.2018, the Respondent No. 1 addressed a Notice claiming an amount of Rs.43 Lakhs from the Corporate Debtor and further alleged that the Corporate Debtor had breached the terms of NDA. The Respondent No. 1 issued Demand Notice dated 31.12.2018 to the Corporate Debtor. xiv. The Corporate Debtor vide reply to Demand Notice dated 29.01.2019, disputed the monies as claimed by the Respondent No. 1 in the Demand Notice. xv. On or about 08.03.2019, the Respondent No. 1 filed the Application before the Adjudicating Authority. xvi. The Corporate Debtor filed its Affidavit in Reply dated 05.11.2019 to the Application. A perusal of the Affidavit in Reply demonstrates the following: a. The Respondent No. 1 joined the Corporate Debtor in or about December 2006 and worked with the Corporate Debtor up to January, 2018. b. The Corporate Debtor made payments to the Respondent No. 1 as per the terms and conditions agreed in the NDA and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.07.2023 and the Judgement was reserved. 5. Counsel for the Appellant during the course of the arguments in their Written Submissions filed before this Tribunal on 31.07.2023 while assailing the Impugned Order submitted as follows: i. The Adjudicating Authority in its Impugned Order, failed to consider the correspondence exchanged between the Corporate Debtor and Respondent No. 1, which clearly bear out a pre-existing dispute , with respect to the claims of the Respondent No. 1. Respondent No. 1, after receiving all his payments under the NDA, addressed an email dated 17.06.2018 to the Corporate Debtor, alleging non-payment of a sum of Rs. 3,00,000/- under the NDA. On the very next day, the Corporate Debtor, vide its email dated 18.06.2018, and subsequent email dated 20.06.2018, outrightly and specifically rejected/disputed the claims of the Respondent No. 1 and specifically informed Respondent No. 1 that the Corporate Debtor had made all payments to the Respondent No. 1, under the NDA and no dues were pending from the Corporate Debtor. ii. The correspondences from the date 17.06.2018 to 22.06.2018, wherein the Corporate Debtor had explicitly disputed and denied the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies regarding operational debt, but the contents of these emails/ letters/minutes of meetings ought to have been factorized to arrive at a finding whether the defence taken by the Corporate Debtor is moonshine defence unsupported by evidence. Surprisingly none of these emails and letters establishing the existence of pre-existing disputes between the parties have been taken into cognisance by the Adjudicating Authority. These being pertinent factors for consideration, to our mind the Adjudicating Authority has committed an error in side-stepping these aspects and admitting Section 9 application. 31. Where operational creditor seeks to initiate insolvency process against a Corporate Debtor, it can only be done in clear cases where no real dispute exists between the two parties which is, however, not so borne out given the facts of the present case. (Emphasis supplied) vi. It is further contended by the Learned Counsel for the Appellant that Respondent No. 1 in his Application which was filed before the Adjudicating Authority had claimed (a) Rs. 1,50,000/- towards salary as per clause 1(a) of the NDA, (b) Rs. 1,50,000/- as per Clause 2(e) of the NDA and (c) Rs. 40,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. He further submitted that the sum of Rs. 40,00,000/- claimed by Respondent No. 1, claimed in the nature of a penalty and not a crystallised amount and, therefore, is not in nature of an admitted `debt . The same is therefore not claimable under the jurisdiction of the Adjudicating Authority under the Code. 6. Learned Counsel for the Appellant based on his submissions submitted that the instant Appeal may be allowed and the Impugned Order be set aside. 7. Counsel for the Respondent No. 1 on the other hand while opposing the submissions made by the Counsel for the Appellant, submitted as follows: i. Learned Counsel for the Respondent strenuously argued that the Appellant has not approached before this Tribunal and has filed the instant Appeal with false, tempered and distorted submissions, made by the Appellant in his Reply Affidavit before the Adjudicating Authority on 05.11.2019, to mislead this Tribunal which is as follows: Date Amount Particular 10.05.2018 Rs.3,19,219/- Salary for 22 days for the month of March, 2018 (additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Courts have held that such litigants are neither entitled to be heard on the merits of the case nor entitled to any relief. (ii) The people, who approach the Court for relief on an ex parte statement, are under a contract with the court that they would state the whole case fully and fairly to the court and where the litigant has broken such faith, the discretion of the court cannot be exercised in favour of such a litigant. (iii) The obligation to approach the Court with clean hands is an absolute obligation and has repeatedly been reiterated by this Court. (iv) Quests for personal gains have become so intense that those involved in litigation do not hesitate to take shelter of falsehood and misrepresent and suppress facts in the court proceedings. Materialism, opportunism and malicious intent have over-shadowed the old ethos of litigative values for small gains v. He further relied on para 24 of the Impugned Order dated 23.10.2022 passed by the Adjudicating Authority in C.P. (IB) No.973/MB/CI/ 2019, whereby the Adjudicating Authority has observed as follows: We note that on a plain reading of the Non-Disclosure Agreement, it is clear that the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief. Clause 2 (i): Salary will be paid every month along with other employees till March 21st, 2018, and full final and Gratuity payments will be done within 30 days from March 21st, 2018. (Emphasis Supplied) viii. It is further submitted that the Notice-reply by the Appellant dated 29.01.2019 which had been received by Respondent No.1 on 08.02.2019 i.e., after 37 days from service of the Demand Notice wherein the Appellant had falsely and frivolously contended in Para 4 of his Reply that `the company had never admitted to make payment of the said penalty as claimed by you, and that being so, the amount of Rs.40,00,000/- is a disputed amount and as such the claim amount falls within the Definition of Claim under Section 3 (6) which defines claim to mean a right to payment even if it is disputed. ix. From the above averments, it gets cleared that it is not the liability but payment of the said penalty amount of Rs.40,00,000/- which is not admitted and disputed by the Appellant that too after receipt of the Demand Notice. x. In view thereof, Learned Counsel for the Respondent submitted that the present Appeal as filed by the Appellant is liable to be reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re uncertain forces in the submissions on behalf of the Counsel for the Appellant that the Adjudicating Authority while passing the Impugned Order failed to consider the correspondences between the Appellant and Respondent No. 1 dated 17.06.2018 to 22.06.2018. Further, the Adjudicating Authority has also not considered paras 5 6 of the Reply Affidavit filed by the Respondent (Appellant herein) before the Adjudicating Authority in correct perspective. 10. Keeping in view of the aforesaid facts and also the Judgement of this Tribunal in `Om Prakash (Supra), we are of the view that the Impugned Judgement passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court-I) dated 23.09.2022 in CP (IB) No.- 973/MB/C-I/2019, cannot be sustained in the eye of law and we hereby allow this Appeal and set aside the Impugned Order passed by the Adjudicating Authority initiating CIRP of the Corporate Debtor and all other Orders issued pursuant to the Impugned Order. The Corporate Debtor is released from the rigours of CIRP and is allowed to function independently through its Board of Directors with immediate effect. The Resolution Professional shall however be paid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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