Jafer Ali vs Amit Naidu & Anr

Jafer Ali ...Appellant Versus Mr. Amit Naidu & Anr. ...Respondents

Present:

For Appellant : Mr. Rohit Sharma, Mr. Chirag Jain and Mr. Nishanth Patil, Advocate

For Respondents : Mr. Salim A. Inamdar and Mr. Ravi Sehgal, Advocates for 1st Respondent

Mr. S. Visvanathan, R.P.

ORDER

09.09.2019 'Mr. Amit Naidu' (Operational Creditor), an ex-employee of

'M/s. PropUrban Advisory Services Private Limited' (formerly known as 'Bluering

Realtech Private Limited'), claimed that Rs. 19,50,000/- is outstanding towards

the salary from August, 2017 to May, 2018. The said ex-employee (original

Operational Creditor) filed an application under Section 9 of the 'Insolvency and

Bankruptcy Code, 2016' (for short, 'the I&B Code') for initiation of the 'Corporate

Insolvency Resolution Process' against 'M/s. PropUrban Advisory Services

Private Limited' (Corporate Debtor). The Adjudicating Authority (National

Company Law Tribunal), Bengaluru Bench by impugned order dated 24th June, 2

2019 having admitted the same, the present appeal has been preferred by the

Director/Shareholder of the 'Corporate Debtor'.

2. Earlier, when the matter was taken up, learned counsel for the Appellant

submitted that the Demand Notice under Section 8(1) issued by Respondent on

12th June, 2018 as Vice President had not at all mentioned the name of the

'Corporate Debtor' and the address shown was the residential address and not

the official address of the 'Branch Office'. Thus, no notice under Section 8(1)

was served on the 'Corporate Debtor'.

3. It was further submitted that the services of the Respondent stood

terminated with effect from 16th November, 2017 and the Appellant had closed

its operation at Pune w.e.f. December, 2017 and in that view of the matter, it is

improbable for the Appellant to pay future salary with regard to the period of

March, 2018 to May, 2018 obligation in respect whereof did not arise.

4. It was further informed by the learned counsel for the Appellant that the

Respondent - 'ex-employee' has given resignation on 18th July, 2018 after

termination on 16th November, 2017.

5. However, on behalf of the Appellant, it was informed that though Demand

Notice under Section 8(1) was not served on the 'Corporate Debtor' by mentioning

the name of the company and that the address shown was as the residential

address, the Appellant has agreed to settle whatever the claim of the Respondent.

6. It is informed that the Appellant has settled the matter with the

Respondent. Mr. Salim A. Inamdar, learned counsel appearing on behalf of 1st

Respondent ('Mr. Amit Naidu') submits that the parties have reached settlement

and now there is no grievance.

Company Appeal (AT) (Insolvency) No. 727 of 2019 3

7. Taking into consideration the stand taken by the parties and the fact that

the Demand Notice under Section 8(1) was not properly served on the office of

the 'Corporate Debtor', we set aside the impugned order dated 24th June, 2019

as the application under Section 9 was not maintainable. However, in view of

the settlement reached by the parties, we direct the Appellant to pay the amount

of Rupees Seven Lakhs on or before 20th September, 2019 and further a sum of

Rupees Seven Lakhs on or before 31st October, 2019. A sum of Rs. 1.5 Lakhs

has been paid by Mr. Amit Naidu to the 'Interim Resolution Professional'

8. In effect, order(s), if any, passed by Ld. Adjudicating Authority appointing

any 'Interim Resolution Professional' and all other order (s) passed by

Adjudicating Authority pursuant to impugned order and action, if any, taken by

the 'Interim Resolution Professional', including the advertisement, if any,

published in the newspaper calling for applications all such orders and actions

are declared illegal and are set aside. The application preferred by Respondent

under Section 9 of the I&B Code, 2016 is dismissed. Learned Adjudicating

Authority will now close the proceeding. The appellant company is released from

all the rigour of law and is allowed to function independently through its Board

of Directors from immediate effect.

9. As a sum of Rs. 1.5 Lakhs has already been paid by Mr. Amit Naidu to

the 'Interim Resolution Professional'. The Adjudicating Authority will now fix

the fee and cost of resolution process after excluding a sum of Rs. 1.5 Lakhs,

as already paid to the 'IRP' by Mr. Amit Naidu. The 'Corporate Debtor' will

pay the fees of the Interim Resolution Professional, for the period he has

functioned as may be determined by the Adjudicating Authority. The appeal

Company Appeal (AT) (Insolvency) No. 727 of 2019 4

is allowed with aforesaid observation and direction. However, in the facts and

circumstances of the case, there shall be no order as to cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/nn/

Company Appeal (AT) (Insolvency) No. 727 of 2019