The NCLAT, Principal Bench, New Delhi observed that Section 8(2)(a) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) provides that the dispute must be in respect of the claimed amount and must not be referable to any other kind of dispute. It was opined by the Tribunal that the plea of the pre-existing dispute must co-relate with the claimed amount by the Operational Creditor. In the present case, the Respondent did not contend that the Appellant is not entitled to salary, gratuity, bonus, etc., The Appellant asked for the salary which became due before the termination order was issued and therefore, there was no pre-existing dispute between the parties.
Brief Facts:
The Appellant is an ex-employee of the Respondent and was appointed as an Associate-CRS of the Respondent Company. The Appellant was responsible for manpower resourcing and recruitment. In 2014, Appellant was promoted as Executive Director but in 2016 his services were terminated on account of fraudulent services. The Respondent accused the Appellant of fraud and breach of trust and vide public notice in the newspaper, disassociated with the Appellant.
Post-termination, the Appellant served a notice under Section 8 of the IBC in the capacity of an Operational Creditor. The Respondent did not reply to the notice and hence, after the expiry of the statutory period, the Appellant filed an application under Section 9 of IBC claiming a certain amount and assigned the date of default as the date of termination of service.
The Adjudicating Authority (NCLT) dismissed the application under Section 9 on the grounds of pre-existing dispute. Therefore, the present appeal against the said order has been filed.
Contentions of the Respondent:
The Respondent alleged that there was a pre-existing dispute between the parties because charges have been framed against the Appellant on account of fraud and breach of trust. Therefore, application in light of Section 8(2)(a) of the IBC will not be maintainable.
Contentions of the Appellant:
It was argued by the Appellant that the claim is in regard to the salary, pay, gratuity, etc., and has nothing to do with the subject matter of FIR.
Observations of the Tribunal:
It was observed that the termination order was based on alleged fraudulent activities done by the Appellant. The Appellant was claiming the salary which became due before the termination order was passed.
Section 8(2)(a) of the IBC provides that the dispute must be in respect of the amount claimed and must not be referable to any kind of dispute. It was opined by the Tribunal that the plea of the pre-existing dispute must co-relate with the claimed amount by the Operational Creditor. In the present case, the Respondent did not contend that the Appellant is not entitled to salary, gratuity, bonus, etc., The Appellant asked for the salary which became due before the termination order was issued and therefore, there is no pre-existing dispute between the parties.
The decision of the Tribunal:
Accordingly, the Tribunal allowed the appeal and set aside the order passed by the NCLT.
Case Title: Mr. Aroon Kumar Aggarwal v. M/s ABC Consultants Pvt. Ltd.
Coram: Hon’ble Mr. Justice Rakesh Kumar Jain
Case No.: Company Appeal (AT) (Ins) No. 409 of 2020
Advocates for Appellant: Advs. Mr. B.R. Sachdeva, Mr. Parvesh Khanna, Mr. Akhilesh Suresh
Advocates for Respondent: Adv. Ms. Gunjan Mittal
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