1. Mr. N Subramanian vs.
M/s Aruna Hotels Limited
This was the first case where the employee approached the adjudicating authorities under this
Code for recovery of their dues against the former employer. The application in this case had
been filed by a former employee of the respondent company claiming arrears before the NCLT
in Chennai. The employee had left his job in the year 2013 and in spite of multiple assurances by
the respondent company regarding the payment of the dues, the amount had not been settled. The
applicant attached a letter by the respondent company along with his petition where the
respondent company has assured the payment of the salary, a list or arrears and an interest of 9
per cent for late payment. The employee sent a demand notice to the respondent company on
29.06.2017 and the respondent company replied to it on 06.07.2017 stating that the salary had
been paid by it and only a gratuity amount of Rs. 5, 85, 577/- was due as on that date. The
respondent company in this case approached the City Civil Court in Chennai on 06.07.2017 and
filed a suit against the operational creditor to declare the previous letter and notice
communications as null and void and also grant a permanent injunction on the operational
creditor for relying on those letters. The Court rejected this plea on the ground that the Suit had
been filed after the delivery of the Demand Notice by the operational creditor to the respondent
company. Therefore the court held that such a suit was instituted by the respondent company in
order to circumvent the initiation of the CIRP by the operational creditor against the corporate
debtor. Therefore the claim of the operational creditor was admitted by the adjudicating authority
for the payment of the unpaid due against the corporate debtor.
2. Nitin Gupta vs. M/s Applied Electro-Magnetic Pvt. Ltd.
This case deals with the admissibility of an application under section 9 by an employee for non-
payment of salary by the respondent company. In this case an application had been filed by an
employee of the respondent company under Section 9 of the Code for non- payment of salary
amounting to Rs. 46, 77, 124/-. The respondent company accepted the non-payment of salary
amounting to Rs. 28, 84, 160/- but raised objections regarding the balance amount. The Court
admitted the application by the employee on the ground of the part admission of the unpaid
salary by the respondent company. It held that the dues in this case fall under the definition of
operational debt as mentioned under Section 5 (21) of the Code and in such a case the employee
is an operational creditor as mentioned under Section 5 (20). The Code provides for admission of
claim of Rs 1, 00, 000/- and thus the current claim in this case was much above the provided
limit and hence it was liable to be admitted. The NCLT while admitting the application rejected
the issue of existence of dispute’ as contended by the respondent company as it could not
substantially prove a case which was pending before the Deputy Labor Commissioner. Therefore
the adjudicating authority held that mere repudiation of the claim in the reply by the respondent
company without material evidence cannot be used as a tool for evasion of liability. The Court
admitted the application on the grounds that firstly, the claim is above the prescribed limit,
secondly, there is existence of a default and lastly, the manner of application as provided under
Section 9 had been complied with.
3. Mr. Suresh Narayan Singh vs. Tayo Rolls Ltd.-NCLAT
The appeal in this case was filed by Mr. Suresh Narayan Singh, who was an Authorized
Representative of 284 workers of “Tayo Rolls Limited” (hereinafter referred to as the “corporate
debtor”) against an order dated 03.01.2018 passed by the NCLT, Kolkata. The NCLT had
rejected an application filed by the appellant under Section 9 of the Code against the corporate
debtor on the ground that the application under Section 9 of the Code has to filed individually
and not jointly. The NCLT also noted that it is not practicable for more than one operational
creditor to file a joint petition as they will have to issue individual demand notices under Section
8 of the Code. The learned counsel appearing on behalf of the appellant contended that even if
the individual claim of the workmen is taken into consideration, the amount of dues which
remain unpaid to each individual worker would amount to more than Rs 1, 00, 000 and even
then, an individual workman in this case would have the right to file a separate application under
Section 9 of the Code. If Section 8 and 9 of the code are read with Form 5, it becomes clear that
the person authorized to act on behalf of the operational creditor is entitled to file an application
under Section 9. The NCLAT held that there is a clear existence of all the required factors, i.e., a
debt’ and a default’, which were not disputed by the corporate debtor, and the application made
under section 9 was complete, therefore, the adjudicating authority should have admitted the
application instead of rejecting it on a technical ground that it was filed by the authorized
representative on behalf of 284 workmen. It held that as it is evident that the unpaid due to each
workman is more than the minimum amount of Rs 1, 00, 000 and there is a default on part of the
corporate debtor, the application under section 9 is fit to be admitted for the initiation of CIRP
against the corporate debtor.
