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Mr Anil J Nemavarkar vs Kumar Builders Mumbai

National Company Law Appellate Tribunal5 April 2022

Ratio decidendi

The rule this decision rests on

A petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 is liable to be rejected where a pre-existing dispute between the parties exists before the issuance of the demand notice under Section 8 of the Code, as shown by complaints and proceedings raised by the operational creditor against the corporate debtor prior to that notice. The Insolvency and Bankruptcy Code is not the forum for resolving disputes of the kind concerning an individual's claim to service or employment benefits; such a remedy lies elsewhere, and the existence of such a dispute is a ground for rejecting the Section 9 application.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

1NATIONAL COMPANY LAW APPELLATE TRIBUNALPRINCIPAL BENCH, NEW DELHICompany Appeal (AT) (Insolvency) No. 330 of 2022

IN THE MATTER OF: Mr. Anil J. Nemaavarkar ...Appellant

Versus M/s. Kumar Builders Mumbai Realty Pvt. Ltd. ...Respondent Now Known as M/s. Kumar Urban Development Pvt. Ltd.

Present: For Appellant: Mr. Sidharth Joshi, Advocate Ambareen, Mr. Lakpa Doma Sherpa, Advocates

For Respondent: ORDER

(Virtual Mode)

05.04.2022: Heard Learned Counsel for the Appellant. This Appeal has

been filed against the Order passed by the Adjudicating Authority (National

Company Law Tribunal, Mumbai Bench) on 09.12.2021 by which Application

being CP(IB) 2121/MB/2019 filed by the Appellant under Section 9 of the

Insolvency and Bankruptcy Code, 2016 (hereinafter referred as 'Code') has been

rejected.

2. The Learned Counsel for the Appellant claimed to be Operational Creditor

and has filed Section 9 Application for debt of Rs. 64,44,2706.00/- including

interest. Appellant claimed to be appointed Vice-President (Coordination) by the 2

Corporate Debtor on 3rd June, 2013. The Appellant's case is that his service were

terminated on 04th June, 2016 thereafter he filed various complaints against the

Corporate Debtor including 'Police Complaint' dated 06th June, 2016. He also

filed complaint before the Labour Authority and thereafter filed this Application

on 04th June, 2019 under Section 9 of the Code.

3. The Adjudicating Authority after hearing the Appellant has dismissed the

Application. The Adjudicating Authority has held that there is 'pre-existing

dispute' between the parties hence the Application under Section 9 of the Code

cannot be admitted. In paragraphs 28 to 32 details of the pre-existing disputes

between the parties have been noticed.

4. The Appellant's Demand Notice under Section 8 of the Code is dated 22nd

May, 2018 after which the Application was filed on 04th June, 2019. The several

complaints and disputes which have been noticed in paragraph 28 to 32 are

before the Demand Notice given by the Appellant under Section 8 of the Code.

5. We are not convinced with the submissions of the Learned Counsel for the

Appellant that there was no dispute raised before the Demand Notice under

Section 8 was issued by the Appellant. Appellant himself has filed large number

of complaints including Police Complaint and Complaint before the Labour

Authority regarding his claim and making other serious allegations against the

Corporate Debtor. We are of the view that Insolvency and Bankruptcy Code is

not for resolving such dispute, the remedy of the Appellant with regard to his

Company Appeal (AT) Ins. No. 330 of 2022 3

services benefits if any, lies elsewhere and Adjudicating Authority has rightly

rejected the Application noticing the 'pre-existing dispute' between the parties.

The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical)

[Ms. Shreesha Merla] Member (Technical)

Basant/nn

Company Appeal (AT) Ins. No. 330 of 2022

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