J U D G M E N T

[Per: Barun Mitra, Member (Technical)]

The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 (‘IBC’ in short) by the Appellant arises out of the Order dated 02.03.2023 (hereinafter referred to as ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench, Court-III) in CP(IB) No.1108/ND/2019. By the Impugned Order, the Adjudicating Authority has dismissed the Section 9 petition filed by the Appellant seeking to bring the Corporate Debtor under the rigours of Corporate Insolvency Resolution Proceedings (‘CIRP’ in short). Aggrieved by this impugned order, the present appeal has been preferred.

2. Making his submissions, the Learned Counsel for the Appellant stated that the Appellant/Operational Creditor was appointed as General Manager in the Corporate Debtor company-M/s Collage Group Infrastructure Private Limited (‘Collage’ in short) on 10.10.2014. The Corporate Debtor also issued a confirmation of appointment letter which shows that the Appellant was an employee of the Corporate Debtor. In due course of time, the Corporate Debtor failed to release timely payments of salary and eventually salary payments came to a halt from 2015 onwards. The Appellant submitted his resignation on 26.01.2016 on the behest of the Corporate Debtor and sent an email to the Corporate Debtor on the same date indicating balance of his arrear salary and requested the Corporate Debtor to pay the same as soon as possible. Following this email, a full and final settlement statement was provided by the Corporate Debtor admitting an outstanding amount of Rs. 9,28,972/- as debt due and payable. It was therefore contended that the Appellant remained an employee of the Corporate Debtor all through until his resignation and hence the Corporate Debtor was liable to clear the operational dues.

3. It was submitted that the Corporate Debtor also made limited part payments of the outstanding dues, but when some cheques issued by the Corporate Debtor were dishonoured and further payments were not forthcoming, the Appellant sent a Section 8 demand notice on 06.03.2019. However, neither any reply was received nor any payments received, and therefore a Section 9 IBC application was filed on 30.04.2019 for default of debt amounting Rs.9,97,747/- only.

4. Advancing their case further, it was pointed out that subsequently a settlement was arrived at between the Appellant and Corporate Debtor which was brought on record before the Adjudicating Authority on 27.02.2020 and the Section 9 application was withdrawn with the liberty to revive the same in the event of failure of settlement between the parties. Owing to breach caused in the terms of settlement by the Corporate Debtor, the matter was reopened before the Adjudicating Authority, by the Appellant. However, the Adjudicating Authority wrongly rejected the Section 9 application by wrongly holding that the Appellant was working with a separate company, namely, MNT Infrastructure Private Limited (‘MNT’ in short) and not with the Corporate Debtor and hence the Corporate Debtor was not liable to pay the dues claimed.

5. Assailing the impugned order, it has been contended that Clause 2 of the letter of appointment clearly shows that the Appellant was under the employment of the Corporate Debtor and not of any separate entity. It was strenuously contended that there is no document to show any appointment/transfer letter of the Appellant to MNT. No documentary evidence has been brought on record by the Corporate Debtor to support the contention that the Appellant was not an employee of the Corporate Debtor.

6. Further keeping in view that the Corporate Debtor had given a full and final settlement statement and thereby agreeing to clear the entire outstanding debt due to the Appellant, it was clear from this wilful admittance of debt that the Appellant was working with the Corporate Debtor and not with any separate entity. While admitting that the