Rolta India Ltd vs Anant Sadekar And Others

Rolta India Ltd. ....Appellant

Vs.

Mr. Anant Sadekar & Ors. ....Respondents Present

For Appellant: Mr. Mahesh Agarwal, Mr. Shivam Shukla, Mr. Shadab Jan, Mr. Sandeep Khairwal, Mr. Yash Tambe & Ms. Prerna Wagh, Advocates.

For Respondents: With Company Appeal (AT) (Ins.) No. 873 of 2021

In the matter of:

Rolta Defence Technology Systems Pvt Ltd. ....Appellant

Vs.

Jayesh Anant Bhusane ....Respondent

Present

For Appellant: Mr. Mahesh Agarwal, Mr. Shivam Shukla, Mr. Shadab Jan, Mr. Sandeep Khairwal, Mr. Yash Tambe & Ms. Prerna Wagh, Advocates.

For Respondent: Mr. Udayasankar Samudrala & Mr. Rajdeep Samudrala, Advocates.

With Company Appeal (AT) (Ins.) No. 874 of 2021

In the matter of:

Rolta Bi & Big Data Analytics Pvt. Ltd ....Appellant 2

Vs.

Rajesh Madhukar Sawant ....Respondent

Present

For Appellant: Mr. Mahesh Agarwal, Mr. Shivam Shukla, Mr. Shadab Jan, Mr. Sandeep Khairwal, Mr. Yash Tambe & Ms. Prerna Wagh, Advocates.

For Respondent: Mr. Udayasankar Samudrala & Mr. Rajdeep Samudrala, Advocates. With

Company Appeal (AT) (Ins.) No. 875 of 2021

In the matter of:

Rolta India Ltd. ....Appellant

Vs.

Vipin Dayaram Yadav ....Respondent

Present

For Appellant: Mr. Mahesh Agarwal, Mr. Shivam Shukla, Mr. Shadab Jan, Mr. Sandeep Khairwal, Mr. Yash Tambe & Ms. Prerna Wagh, Advocates.

For Respondent: Mr. Udayasankar Samudrala & Mr. Rajdeep Samudrala, Advocates.

JUDGMENT

(03rd June, 2022)

Ashok Bhushan, J.

1. These Appeals by the same Appellant have been filed against the orders

of the Adjudicating Authority (National Company Law Tribunal), Mumbai

Bench, by which the Appellant has been directed to deposit the unpaid TDS

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 3

amount within the period of 15 days. Company Appeal (AT) (Ins.) No. 506 of

2022 is against the order dated 25.03.2022 passed in C.P.(IB) No. 566(MB)

2021 filed by the Respondent- Operational Creditor. Company Appeal (AT)

(Ins.) No. 873 of 2021 is filed against the order dated 24.09.2021 passed in

C.P.(IB) No. 1321(MB)/2020 by the Respondent- Operational Creditor under

Section 9. Company Appeal (AT) (Ins.) No. 874 of 2021 is against the order

dated 24.09.2021 passed in C.P.(IB) No. 1373(MB) 2020 filed by the

Respondent- Operational Creditor. Company Appeal (AT) (Ins.) No. 875 of

2021 has been filed against the order dated 24.09.2021 passed in C.P.(IB) No.

1371(MB) 2020 filed by the Respondent- Operational Creditor. By all orders

impugned in this Appeal direction has been issued to deposit the TDS amount

deducted from the employees. Aggrieved against the order, these Appeals have

been filed by the Appellant- Corporate Debtor.

2. Section 9 Applications were filed by the Operational Creditors, the ex-

employees of the Appellant, before the Adjudicating Authority. This Tribunal

while entertaining the Appeals have passed interim order in all the above

Appeals staying the impugned direction passed by the Adjudicating Authority

for depositing the TDS amount. All the Appeals raising common question of

facts and law and it is sufficient to notice the facts in Company Appeal (AT)

(Ins.) No. 506 of 2022 for deciding all these Appeals.

The Respondents-ex employees of the Appellant had filed C.P.(IB)

No.566(MB)/2021 before the Adjudicating Authority claiming an amount of

Rs.5,36,72,736/- towards various heads. It is to be noted that apart from the

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 4

above Company Petition, various other insolvency applications under Section

9 were filed by the other ex-employees of the Appellant. C.P. No. 1069 of 2020

filed by one Shri Dinesh Gupta was admitted on 13.05.2021 against which

order Appellant preferred Company Appeal (AT) (Ins.) No.384 of 2021 where

this Tribunal directed the Adjudicating Authority to grant stay on the

formation of the Committee of Creditors (CoC). On 23.06.2021, the Appellant

entered into a Settlement Agreement with ex-employees who had filed a

Petitions including the Respondents, wherein it was agreed that on receipt of

Settlement Amount, ex-employees would withdraw their respective Petitions.

The Joint Settlement Agreement also provided that the Appellant shall make

payment of the settlement amount by way of demand drafts and that the

payment of statutory dues such as the payment of TDS would be made

directly to the relevant authorities subject to outcome of the pending

proceedings before the relevant income tax authorities. The Adjudicating

Authority had rejected the Application for withdrawal filed by Shri Dinesh

Gupta which order was challenged before the Hon'ble Supreme Court and the

Hon'ble Supreme Court had set aside the order of Adjudicating Authority vide

its judgment dated 25.08.2021 in Civil Appeal No.4993 of 2021- "Kamal K.

Singh vs. Dinesh Gupta & Anr." and allowed the withdrawal Application.

After Settlement Agreement dated 23.06.2021, the settlement amount

towards the Respondents were paid by the Corporate Debtor and when

C.P.(IB) No.566(MB)/2021 was taken for consideration where Counsel for the

Operational Creditors submitted that the Corporate Debtor has paid the dues

of employees. However, the Counsel for the Operational Creditors further

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 5

stated that the TDS deducted by the Corporate Debtor has not been deposited

with the Income Tax Authority. The Adjudicating Authority passed an order

on 25.03.2022 granted time to the Operational Creditor to file details with

respect to the amount settled with the employees Provident Fund amount and

amount of TDS and the Corporate Debtor, in the meantime, directed to deposit

unpaid TDS amount within a period of 15 days. Aggrieved against the said

order, this Appeal has been filed.

3. We may further notice the facts in one Appeal being Company Appeal

(AT) (Ins.) No. 873 of 2021 whereby impugned order dated 24.09.2021, the

Adjudicating Authority allowed the Application CP(IB)- 1321(MB)/2020 to be

withdrawn. However, while permitting withdrawal directing the Corporate

Debtor to deposit TDS amounts deducted from the employee, if not already

paid to the Central Government Account within a period of 15 days.

4. Learned Counsel for the Appellant challenging the impugned orders

contends that the Adjudicating Authority ought not to have directed to deposit

the TDS amounts by the Corporate Debtor although Corporate Debtor in the

Settlement Agreement has agreed to deposit the amount but the Income Tax

Department shall take its own course for recovery of the TDS amount. It is

further submitted that when the Settlement entered between the Operational

Creditor and the Corporate Debtor in other three Appeals except in Company

Appeal (AT) (Ins.) No. 506 of 2022, the Adjudicating Authority has allowed the

Application for withdrawal. There was no occasion for further issuing

direction to deposit TDS amounts within 15 days.

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 6

5. Learned Counsel appearing for the Respondents refuting the

submissions of the Learned Counsel for the Appellant contends that the TDS

amounts was deducted several years ago and on Application of the Corporate

Debtor, the Income Tax Department itself has stayed the recovery till

30.06.2021 and after that there is no interim order. Further, due to non-

deposit of the TDS amounts which was already deducted by the Corporate

Debtor in the Income Tax Department, Appellant had not been able to receive

the tax benefit in the Income Tax which was to be paid by the Appellant.

6. We have considered the submissions of the Learned Counsel for the

parties and perused the record.

7. The Settlement Agreement as is brought on the record in Company

Appeal (AT) (Ins.) No. 506 of 2022 contains following conditions in Clause 8:-

"8. It is agreed between the Parties that the Settlement Amounts set out herein in Schedule I to the present Joint Settlement does not include the claim of the Operational Creditors towards the unpaid Tax Deducted at Source and Provident Fund contributions of employees and employers (together referred to as "the Statutory Dues"), as applicable. Mr. Kamal Singh Krishan will ensure that the Corporate Debtors will make payments towards the Statutory Dues of each of the Operational Creditors, directly to the concerned statutory authorities on or before 20th July 2021, subject to the proceedings

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 7

pending before the Commissioner of Income Tax and the Orders passed therein."

8. In the other Appeal, for example Company Appeal (AT) (Ins.) No. 873 of

2021, similar Settlement Agreement was entered where the Corporate Debtor

undertook to deposit the TDS amounts before 10.07.2021. In paragraph 7 of

the Settlement Agreement dated 10.06.2021, following has been stated:-

"7. It is agreed between the Parties that the Settlement Amount set out herein in Schedule I to the present Settlement Agreement does not include the claim of the Operational Creditors towards the unpaid Tax Deducted at Source and Provident Fund contributions of employees and employers (together referred to as "the Statutory Dues"), if applicable.

Mr. Kamal Singh Krishan will ensure that the Corporate Debtors will make the payment of the Statutory Dues (if any) directly to the statutory authorities on or before 10th June 2021, subject to the proceedings pending before the Commissioner of Income Tax and the Orders passed therein. In case of any penalties levied upon the Operational Creditors by the Income Tax Department, the same shall be paid to the specific employees upon furnishing the original demand notice. On payment of the Statutory Dues, the necessary intimation will be sent to the respective authorities."

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 8

9. There is no dispute that the Corporate Debtor had agreed in the

Settlement Agreement with the ex-employees to deposit the TDS amount.

Further, there is no dispute that the dues of the ex-employees including the

Respondents in these Appeals were paid by the Corporate Debtor. When the

dues under the Settlement Agreement was paid by the Corporate Debtor and

the CoC had not been constituted, the Adjudicating Authority has rightly

permitted the withdrawal of the Application under Section 9 in three Appeals.

10. The question to be considered in these Appeals is as to whether

direction of the Adjudicating Authority to deposit the unpaid TDS amount

within the period of 15 days ought to have been issued by the Adjudicating

Authority.

11. We have already extracted the relevant clause of Joint Settlement

Agreement where the Appellant undertook to make the payment of TDS

amount to the concerned authorities on or before 20.07.2021. In Company

Appeal (AT) (Ins.) No. 506 of 2022, the Appellant has brought on record a

notice issued by the Income Tax Authority dated 20.10.2021 to the Principal

Controller of Defence Accounts, Ministry of Defence, G-Block, Krishna Menon

Marg, New Delhi on the subject recovery proceedings in the case of M/s. Rolta

India Ltd.

12. From the aforesaid, it is clear that the steps are being taken by the

Income Tax Department for recovery of TDS amount. Present is a case where

deposit of TDS amount deducted from the salary of the employees was not

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 9

deposited by the Corporate Debtor inspite of specific clause entered into the

Joint Settlement Agreement that the amount shall be deposited by the

Appellant on or before 20.07.2021. The submission of the Counsel for the

Appellant is that when Application under Section 9 was to be withdrawn by

virtue of payment of all dues to employees under the Settlement Agreement,

there was no occasion or jurisdiction of the Adjudicating Authority to issue

direction to deposit TDS amount. We are of the view that while permitting

withdrawal of Section 9 Application, the Adjudicating Authority could have

passed an order taking into consideration the Settlement entered between the

parties. Hence, direction to Appellant to deposit the deducted amount of TDS

cannot be faulted. The Appellant who has undertaken under the Settlement

Agreement to deposit the TDS amount directly to the concerned authorities

cannot be heard that it should not be asked to deposit the said amount.

Under the Income Tax Act, 1961, the Income Tax Authority has ample

jurisdiction to take steps for recovery of its dues including the amount of TDS

which although deducted has not been deposited by the Appellant. We only

observe that the Adjudicating Authority after withdrawal of Section 9

Application ought not take any further steps regarding deposit of TDS amount

by the Appellant and further steps for recovery and appropriate action against

the Corporate Debtor regarding deposit of the TDS amount is to be taken by

the Income Tax Authorities.

13. In C.P.(IB) No. 1321(MB)/2020 (Company Appeal (AT) (Ins.) No. 873 of

2021), C.P.(IB) No. 1373(MB) 2020 (Company Appeal (AT) (Ins.) No. 874 of

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 10

2021) and C.P.(IB) No. 1371(MB) 2020 (Company Appeal (AT) (Ins.) No. 875

of 2021), the Adjudicating Authority has already allowed withdrawal of

Section 9 Applications but in C.P.(IB) No. 566(MB) 2021 (Company Appeal

(AT) (Ins.) No. 506 of 2022), Section 9 Application is still pending which was

directed to be listed on 14.06.2022. Before us, Learned Counsel for the

Respondent does not dispute that the entire dues of the employees have been

paid.

14. In view of the aforesaid, in Company Appeal (AT) (Ins.) No. 506 of 2022,

we permit the withdrawal of Section 9 Application by the Operational Creditor

being C.P.(IB) No. 566(MB) 2021 and no further steps need to be taken in

C.P.(IB) No. 566(MB) 2021. We, however, do not interfere with the order

passed by the Adjudicating Authority directing the Corporate Debtor to

deposit the unpaid TDS amount. We notice that in the impugned order passed

in all these Appeals, directions have been issued to deposit the TDS amount

within 15 days. We only observe that the deposit of TDS amount by the

Appellant shall be in the period as permitted by the Income Tax Authorities.

15. In view of the foregoing discussions, we dispose of these Appeals in

following manner:-

(i) Company Appeal (AT) (Ins.) Nos. 873, 874 and 875 of 2021 are

disposed of upholding the direction of the Adjudicating Authority to the

Appellant to deposit the TDS amount. We, however, set aside the period

of 15 days as allowed by the Adjudicating Authority to the Appellant to

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021 11

deposit and we observe that the deposit shall be made by the Appellant

during the period as provided by the Income Tax Authorities.

(ii) Company Appeal (AT) (Ins.) No.506 of 2022 is partly allowed.

Application under Section 9 filed by the Operational Creditor being

C.P.(IB) No. 566(MB) 2021 is allowed to be withdrawn. Direction in the

impugned order to deposit the unpaid TDS amount is maintained.

However, the direction to deposit the amount within 15 days is set aside

with liberty to Appellant to deposit the amount within the period as

provided by the Income Tax Authorities.

[Justice Ashok Bhushan] Chairperson

[Shreesha Merla] Member (Technical)

[Naresh Salecha] Member (Technical)

New Delhi Anjali

Company Appeal (AT) (Insolvency) No. 506 of 2022, 873-875 of 2021