TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1389
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....ndent No.1 appointing the Appellant as Chief Mentor and Chief Executive Officer Tele-Health (India) w.e.f 01.09.2020. The Employment Agreement contemplated base salary of USD 280,000/- per year. It also mentioned that Appellant may be eligible to receive a semi-annual discretionary bonus and some employee benefits. The holding company of the Respondent- Lytus Technologies Private Limited is Lytus Technologies Holding Pvt. Ltd. which was incorporated at British Virgin Islands. An offer of appointment dated 27.01.2021 was given by the holding company to the applicant as an Independent Director in the Board of holding company. The offer dated 27.01.2021 given by the holding company to the Appellant was accepted by the Appellant on 27.01.2021. A declaration dated 08.05.2021 was filled by the Appellant which information was requested by a questionnaire for record of the holding company in connection with preparation by the company of registration statement in Form F-1 with the proposed initial public opinion (Registration Statement). In the questionnaire filled by the Appellant, he claimed his appointment as an Independent Director of the holding company w.e.f. 27.01.2021. 2.2. After....
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....lant has accepted directorship in the holding company which is publicly listed company on NASDAQ as a foreign filler and is governed by laws of British Virgin Islands and the Corporate Debtor is wholly owned subsidiary of the holding company. Reply notice further pleaded that Appellant accepted appointment as Independent Director on 27.01.2021 in the holding company. Independent Director cannot be employee of company or its subsidiary. It was pleaded that nothing is payable to Appellant and he is not the employee of corporate debtor. The reply to demand notice captured other disputes with the claim of the Appellant. After receiving the reply to the demand notice, Appellant filed Section 9 application being CP(IB) No.1033(MB)2024 claiming total amount of Rs.16,43,83,469.88. As per the Employment Agreement dated 24.08.2020 which salary was claimed from September 2020 to September 2023. With regard to date of default of salary, different dates from September 2020 to September 2023 were mentioned. Section 9 application was replied by the corporate debtor by filing a detailed reply to Section 9 application. In reply to Section 9 application, Corporate Debtor refuted the claim of the App....
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....utory threshold legally due to the Appellant by Corporate Debtor. Corporate Debtor having defaulted in payment of the said dues, Section 9 application requires admission. It is submitted that under the Employment Contract dated 24.08.2020, Appellant was entitled for salary of USD 2,80,000/- per annum payable fortnightly. It is submitted that the Appellant was appointed Independent Director w.e.f. 14.06.2022 which date is reflected in the necessary filings by the holding company, hence, dues from 01.09.2020 to 14.06.2022 surpass the statutory threshold and at no point of time, the said appointment was terminated. Appellant worked up to June 2022 before his appointment as Independent Director in holding company. Regulatory filings of the holding company are inherently contradictory. In the NASDAQ disclosures date of appointment of the Independent Director of the Appellant is mentioned as 14.06.2022. Thus, Corporate Debtor was clearly liable to make payment of salary till 14.06.2022. Appellant was also entitled for the bonus as per the employment contract. The questionnaire which is relied by the corporate debtor is self-serving document. The questionnaire and offer of appointment req....
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....f Independent Director for which he has made declaration in writing, Appellant cannot be allowed to resile from his own statement. More so, much before the issuance of demand notice, on 03.10.2023, legal notice dated 15.07.2023 was issued by the Appellant claiming the same amount which was refuted by reply dated 26.07.2023. In reply dated 26.07.2023, detailed reasons were given by the Corporate Debtor disputing the claim of the Appellant. Thus, there was pre- existing dispute between the parties much before issuance of demand notice, hence the Adjudicating Authority has rightly dismissed the application relying on pre-existing dispute. The submission of the Appellant that defence raised by the Corporate Debtor refuting the claim of the Appellant is a moonshine defence and is an afterthought cannot be accepted. Appellant having accepted offer of the Independent Director given by the holding company on 27.01.2021, he could not continue in the employment of the corporate debtor to which Appellant was well aware. Due to this reason, no claim was raised of any salary for about two years and only after July 2022 when there was some dispute in the holding company also Appellant started ra....
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....the Hon'ble Supreme Court. As noticed above, one of the dispute which exists between the parties is as to the date of appointment of Appellant as Independent Director in the holding company. The case of the Corporate Debtor is that offer of appointment was given on 27.01.2021 which was accepted by the Appellant on the same day, hence, Appellant will be treated to be an Independent Director w.e.f. 27.01.2021. It is further submitted by the Corporate Debtor that the Appellant has filed a declaration in form of questionnaire on 08.05.2020 where he has shown his date of appointment as 27.01.2021 and further he has declared that he has not in any employment of any subsidiary company of the holding also. Thus, Appellant has abandoned his claim of appointment in the Corporate Debtor which is clear from the declaration made. The above submission of the Corporate Debtor is supported by the document which has been brought on the record by the Appellant himself by means of additional affidavit. In the additional affidavit at page 21, the copy of the offer letter dated 27.01.2021 issued by the holding company to the Appellant for appointment as Independent Director has been brought on record w....
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....record along with IA No.5679 of 2025 to take additional document which contains filing on 04.05.2022 with the Security and Exchange Commission of United States. The above record indicates that the date of appointment in the filling by holding company for the Security and Exchange Commission of United States refers to 14.06.2022. As noted above, the above dates of appointment of the Appellant as contended by both the parties are bone of contention between the parties. We only observe that the contention raised by both the parties raises dispute which cannot be said an afterthought and moonshine. 13. As noted above, the demand notice under Section 8 has been issued by the Corporate Debtor on 03.10.2023. prior to demand notice, Appellant has issued a legal notice dated 15.07.2023 both to the Corporate Debtor and holding company where an amount of 1,08,330.33 USD has been claimed from arrears of Corporate Debtor. The said demand notice claiming salary from September 2020 with the Corporate Debtor as Chief Mentor and Chief Executive Officer. Demand notice in detail claimed was arrears of salary from 01.09.2020 and other dues which demand notice was immediately replied and refuted by ....
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....ent accepted the Independent Directorship of Lytus BVI." 14. The reply to the legal notice clearly has stated in detail the case of the Corporate Debtor and has categorically refuted any entitlement of any arrear of salary by the Appellant. Each and every claim was refuted by giving relevant details as noticed above. In paragraph 16 again with respect to case set up by the Appellant in the legal notice detailed reply was given. Paragraph 16 is as follows:- "16. I shall now deal with the contentions raised by you paragraph wise. a. With reference to paragraph 1, admittedly your client was appointed as an Independent Director of Lytus BVI on 27-01-2021. By virtue of that appointment, the role of your client in Lytus India stood terminated. With reference to your client's qualifications and expertise, the same is denied and you are put to strict proof thereof. b. With reference to paragraph 2, admittedly your client entered into the Employment Agreement. However, your client never performed any of his obligations under the agreement and had suppressed crucial facts from my clients prior to entering into the same. In any case, the same stood terminated....
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....malign the reputation of my clients. k. With reference to paragraph 13, it is denied that my clients have accepted and benefitted from your client's engagement and services in any manner. My clients deny that there has never been any indication from my clients that there have been deficiencies in the services provided by your client l. With reference to paragraph 14, my Clients deny that they have committed any breach of propriety or cheating under the listing laws of the NASDAQ and the SEC of the United States. It is denied that there is any misconduct on the part of my clients that undermines the integrity of financial markets and violates the trust placed in corporate entities operating in those jurisdictions. m. With reference to paragraph 15, it is denied that there are any outstanding payments or shares due to your client. It is denied that any financial injustices have been caused to your client. n. With reference to paragraph 16, the claims therein are denied as per the contentions raised hereinabove. o. With reference to paragraph 17, it is denied that your client has any legal basis for initiating any proceedings, civil or ....
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....t assured that we are trying our best within the contract as to how your claims can be considered by the Management and which is the best way to resolve the same. I understand from the Management that you were issued a Letter of Appointment on 24 Aug. 2020 on an annual salary of USD 280,000. It was also clarified in the said letter that the said salary would be periodically reviewed as a part of regular review of the management. This employment was categorically at will. Thereafter, the Company got listed in June 2022 however, on 27 Jan. 2021 you had accepted to be an independent director on the Board for a stock compensation of USD 75,000. As you are aware, I had by my email dated 18th January 2023 advised the Board, including you that once having accepted to be an independent director on the Board, it was legally not tenable for the employment contract to continue. In light of the above, the Management has proposed the following resolution plan to your request. 1. Salary from September 2020 to February 2021 USD 116,666.67 less USD 35,000 already paid to you in cash. Hence, the balance amount due is USD 81,666.67. 2. With respect to USD....
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....Sixty-Nine Eight Eight Only) Date on which the default occurred: A. Base Salary Dates of Default Amount of Default (USD) Amount of Default (INR) Sep 2020 23,333.33 19,37,561 Oct 2020 23,333.33 19,37,561 Nov 2020 23,333.33 19,37,561 Dec 2020 23,333.33 19,37,561 Jan 2021 23,333.33 19,37,561 Feb 2021 23,333.33 19,37,561 Mar 2021 23,333.33 19,37,561 Apr 2021 23,333.33 19,37,561 May 2021 23,333.33 19,37,561 Jun 2021 23,333.33 19,37,561 Jul 2021 23,333.33 19,37,561 Aug 2021 23,333.33 19,37,561 Sep 2021 23,333.33 19,37,561 Oct 2021 23,333.33 19,37,561 Nov 2021 23,333.33 19,37,561 Dec 2021 23,333.33 19,37,561 Jan 2022 23,333.33 19,37,561 Feb 2022 23,333.33 19,37,561 Mar 2022 23,333.33 19,37,561 Apr 2022 23,333.33 19,37,561 May 2022 23,333.33 19,37,561 June 2022 23,333.33 19,37,561 July 2022 3,333.33 2,76,766.39 Aug 2022 23,333.33 19,37,561 Sep 2022 23,333.33 19,37,561 Oct 2022 8,333.33 6,91,916.39 Nov 2022 23,333.33 19,37,561 Dec 202....