2021 (11) TMI 1027 - Tri - Insolvency and Bankruptcy

Tribunal dismisses petition under Insolvency and Bankruptcy Code due to breach of employment contract

IN THE MATTER OF: Ms. A. Chandani D/o. Mr. Anand Gupta Versus Shreyas Holistic Remedies Pvt Ltd.  

The Tribunal dismissed the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, due to a prima facie breach of the employment contract by ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - breach of Employment Contract - HELD THAT:- The counsel for Corporate Debtor would contend that the claim of the entire amounts made by the Operational are false and are denied. The counsel would contend that the Operational Creditor went on a vacation to Bali despite leave being not sanctioned which is in complete violation of the terms and conditions of appointment and thereby causing termination of services. The counsel for Corporate Debtor would also contend that after the Operational Creditor termination, many clients who were availing services had abruptly cancelled their procedures apparently under Operational Creditor influence which is poaching of clients thereby causing huge loss to the Corporate Debtor as such the Operational Creditor is guilty of gross misconduct. The amounts which had to be refunded to the Corporate Debtor is ₹ 2, 13,000/- during the period from September, 2018 to January, 2019. Infact, the Corporate Debtor was seriously considering taking legal action for recovery of the amounts from the Operational Creditor - The counsel for Corporate Debtor would also contend that the Operational Creditor influenced other two Doctors and staff to leave the organisation and join a competitor which amounts to gross misconduct and poaching of staff and sharing crucial information of the Corporate Debtor with the competitors. Prima facie there is a breach of Employment Contract, she went outside without sanction of any leave or permission. Relying on the documents filed by both the parties, the petition deserves to be dismissed. The petition is dismissed. Issues:1. Alleged default in salary payment and Provident Fund contributions by the Corporate Debtor towards the Operational Creditor.2. Dispute over the termination of the Operational Creditor's employment and subsequent claims.3. Legal contentions regarding breach of employment contract, vacation without permission, poaching of clients/staff, and misconduct by the Operational Creditor.Analysis:1. The Operational Creditor filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, alleging default by the Corporate Debtor in paying salary and Provident Fund contributions. The Operational Creditor claimed an amount of Rs. 3,74,004, including salary dues and interest. The Corporate Debtor disputed these claims, asserting no liability towards the Operational Creditor and denying the alleged defaults. The Operational Creditor provided evidence of email conversations, legal notices, and requests for salary payment, while the Corporate Debtor contended that all dues were settled and no liability existed.2. The dispute further involved the termination of the Operational Creditor's employment by the Corporate Debtor. The Operational Creditor claimed wrongful termination without notice or salary in lieu as per the employment terms. The Corporate Debtor argued that the Operational Creditor's claims were false, citing breaches of employment terms, such as unauthorized vacation, poaching of clients/staff, and sharing sensitive information with competitors. The Corporate Debtor maintained that the Operational Creditor's actions led to financial losses and potential legal action for recovery.3. Legal contentions centered on the breach of the employment contract by the Operational Creditor, including unauthorized vacation, poaching of clients/staff, and misconduct. The Operational Creditor's counsel argued for settlement of pending dues and benefits, emphasizing assurances made by the Corporate Debtor. Conversely, the Corporate Debtor's counsel highlighted the Operational Creditor's alleged misconduct, influencing clients/staff, and causing financial losses. After reviewing the submissions and evidence, the Tribunal found a prima facie breach of the employment contract by the Operational Creditor, leading to the dismissal of the petition.In conclusion, the Tribunal dismissed the petition based on the breach of the employment contract and unauthorized actions by the Operational Creditor, as evidenced by the submissions and documents presented during the proceedings.