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SUPREME COURT OF INDIA
ROHINTON FALI NARIMAN, B.R. GAVAI, HRISHIKESH ROY, JJ.
N. Subramanian – Appellant
Versus
M/s Aruna Hotels Ltd. and Another – Respondents
Civil Appeal No. 187 of 2019, Civil Appeal Diary Nos. 34836, 34839, 34841 of 2018
Decided On : 03-03-2021
Insolvency and Bankruptcy Code, 2016 - Sections 9 and 14 - Resolution Professional and imposed a moratorium - Arrears of salary - Retirement from service - Application that was made by Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 - Appellant averred that a sum was owed to him, being arrears of salary when he retired from service, and that several acknowledgments of liability have been given of the arrears payable, last of which was by a letter erstwhile Managing Director of Company - Corporate Debtor replied to aforesaid Section 9 application denying any liability and, in any case, stated that claims that are made by Appellant are time-barred - National Company Law Tribunal in its judgment setting out facts and, in particular, setting out acknowledgement of liability letter went on to state that principal amount being admitted, a case has been made out for admission - Even a cursory look at the said voucher by the naked eye would show that the name of the Appellant has been filled by somebody different from person who has filled – in a different handwriting - Amount paid is in “full and final” settlement of arrears of salary – Held, Petition three years have not elapsed least to extent of an acknowledgement made by then Managing Director of Corporate Debtor, arrears of salary due for a period of at least 3 years prior would certainly be within limitation, and payable to Appellant - Case, it is clear that NCLT judgment is correct in admitting the Section 9 application by Appellant correctly points out that Employees Provident Fund letter was only a red-herring, and has nothing to do with arrears of salary which had to be paid - It is clear that there is an acknowledgement of liability, which therefore shows that there is no “dispute” as to amounts owed to the Appellant - Impugned NCLAT judgment is set aside - NCLT judgment is restored to file - Alternative argument of Mr. Parasaran also stands dismissed in view of what has been held by this judgment - Appeal is allowed.
JUDGMENT :
ROHINTON FALI NARIMAN, J.
CIVIL APPEAL NO. 187 OF 2019
1. I.A. No. 163654 of 2019 for intervention is dismissed.
2. The present appeal is filed by an erstwhile employee of the Corporate Debtor, i.e. the Respondent No. 1 Company. The Appellant joined the Corporate Debtor as a Personal Assistant on 01.01.1983 and over the years received several promotions, including to Manager-Administration. His final designation before he left from service in 2013 was Public Relations Manager.
3. This appeal arises from an application that was made by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 [“IBC”] dated 21.07.2017. In this application, the Appellant averred that a sum of Rs. 1.87 Crores was owed to him, being the arrears of salary from the year 1998 till 2013 when he retired from service, and that several acknowledgments of liability have been given of the arrears payable, the last of which was by a letter dated 30.09.2014 by the erstwhile Managing Director of the Company. The Corporate Debtor replied to the aforesaid Section 9 application denying any liability and, in any case, stated that claims that are made by the Appellant are time-barred. The National Company Law Tribunal [“NCLT”] in its judgment dated 17.11.2017, after setting out the facts and, in particular, setting out the acknowledgement of liability letter dated 30.09.2014, went on to state that the principal amount of Rs. 1.06 Crores being admitted, a case has been made out for admission. It also referred to a certain “payment voucher” (which was relied upon by the learned counsel for the Company), stating that this voucher was merely a red-herring, and in any case could not be relied upon. According to the NCLT, even a cursory look at the said voucher by the naked eye would show that the name of the Appellant has been filled by somebody different from the person who has filled – in a different handwriting - that the amount paid is in “full and final” settlement of the arrears of salary. It was also held that this payment voucher was only proof of payment of arrears of salary of 6 months’ payment @ Rs. 35,000/- p.m. which was not paid on the due dates, but which was paid in one go. In any event, the NCLT held that this voucher was not part of the claim of the Appellant.
4. The NCLT then referred to a Civil Suit that was filed on 06.07.2017 by the Corporate Debtor one week after the notice under Section 8 of the IBC was issued by the Appellant (i.e. on 29.06.2017). The suit contained the following prayers:
(b) grant permanent injunction restraining the 2nd defendant from relying on or claiming against the plaintiff based on the alleged letters/notices dated 30.09.2006, 22.01.2013, 30.06.2013, 31.03.2014 and 30.09.2014.”
The NCLT went on to state that the suit was a desperate attempt of the Company to get out of acknowledgements of liability that were due, and appears to be “mala-fide, fraudulent and mischievous.”
5. Mr. Ritin Rai, learned Senior Advocate appearing for the Appellant, informs us that this suit has been dismissed for non-prosecution. We are informed that an application to restore the suit to the file is pending.
6. Referring to the point of limitation, the NCLT held in favour of the Appellant, relying upon the acknowledgement dated 30.09.2014, as a result of which, it admitted the petition and appointed an Interim Resolution Professional and imposed a moratorium under Section 14 of the IBC. In the appeal filed by a shareholder of the Corporate Debtor (i.e. Respondent No. 2 before us), the National Company Law Appellate Tribunal [“NCLAT”] referred to a letter by the Employees Provident Fund Organisation dated 13.04.2016 and stated that the Appellant’s claim has been settled as a result of that letter. It then, in a cryptic fashion, went into
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