Operational Creditor Wins Case for Unpaid Salaries under Insolvency Code

The National Company Law Tribunal, New Delhi Bench, ruled in favor of the Operational Creditor in the case involving the initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Tribunal found that the Corporate Debtor failed to make salary payments, causing financial hardships to the Operational Creditor. Despite the Corporate Debtor disputing the claim and alleging mala fide intentions and suppression of material facts by the Operational Creditor, the Tribunal held in favor of the Operational Creditor, emphasizing the overdue salary payment issue.

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Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Non-payment of salary leading to financial hardships.
3. Dispute raised by the Corporate Debtor regarding the salary claim.
4. Allegation of mala fide intentions and suppression of material facts by the Operational Creditor.

Issue 1: Initiation of Corporate Insolvency Resolution Process
The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Operational Creditor, seeking the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, a private limited company. The Operational Creditor worked as an Executive-Marketing under the Corporate Debtor and faced salary payment issues, leading to the demand for overdue salary amount along with interest.

Issue 2: Non-payment of salary leading to financial hardships
The Operational Creditor faced financial hardships due to the Corporate Debtor withholding salary payments for several months in different instances. Despite facing salary skips, the Operational Creditor continued working under the employment of the Corporate Debtor until resigning in October 2017. The total outstanding salary amount, along with interest, was claimed through a demand notice.

Issue 3: Dispute raised by the Corporate Debtor
The Corporate Debtor disputed the claim made by the Operational Creditor through a reply dated 22.02.2019, raising objections about the legality of the demands and denying liability. The Corporate Debtor claimed that the demand raised was disputed, not admitted, and was allegedly barred under limitation, contending that no amount was due and payable. Additionally, the Corporate Debtor accused the Operational Creditor's father of causing losses to the company.

Issue 4: Allegation of mala fide intentions and suppression of material facts
The Corporate Debtor alleged that the Operational Creditor filed the petition with mala fide intentions, misleading and misrepresenting facts before the Tribunal. The Corporate Debtor claimed that the Operational Creditor deliberately suppressed material facts, invoking the principle that a person not coming to court with clean hands is not entitled to relief. The Corporate Debtor also argued that the Operational Creditor was not eligible for gratuity, citing a Supreme Court decision for reference.

This detailed analysis covers the key issues addressed in the judgment delivered by the National Company Law Tribunal, New Delhi Bench.

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