Vivek Pasricha & Anr vs Amit Sachdeva & Anr

[Arising out of Order dated 3rd July, 2019 passed by the Adjudicating Authority (National Company Law Tribunal) Principal Bench, New Delhi in the Company Petition No. (IB) - 1218 (PB) / 2018.

IN THE MATTER OF: Vivek Pasricha and Anr. .....Appellants Vs. Amit Sachdeva and Anr. ......Respondents

Present : For Appellant: Mr. Ruchin Middha and Mr. Iggu Chittiappa, Advocates For Respondents: Mr. Shalok Chandra, Advocate

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

'Dr. Amit Sachdeva' - the 1st Respondent filed application u/s 9 of the

Insolvency & Bankruptcy Code, 2016 ('I&B' Code, for short) against M/s.

'Axiss Dental Pvt. Ltd. ('Corporate Debtor') which has been admitted by the

Adjudicating Authority ('National Company Law Tribunal') Principal Bench,

New Delhi by impugned order dated 3rd July, 2019.

Company Appeal (AT) (Insolvency)No. 759 of 2019

2. Learned Counsel appearing on behalf of Appellant submitted that

there was pre-existing dispute, therefore, the application u/s 9 of the 'I&B'

Code was not maintainable.

3. On the other hand, according to the learned counsel for the 1st

Respondent, there was no pre-existing dispute.

4. Learned Counsel for the Appellant placed reliance on Company

Petition No. 96/241-242/(PB) of 2018 preferred by 1st Respondent ('Dr. Amit

Sachdeva') u/s 241, 242 and 244 of the Companies Act, 2013 alleging

certain acts of 'oppression and mis-management' against the Respondent

Nos. 2 to 7 of the said petition including the 'Corporate Debtor'. The said

Company petition is pending for consideration before the 'National Company

Law Tribunal', New Delhi wherein the 1st Respondent has filed one

Interlocutory Application on 5th April, 2018 for following Interim relief: -

"Prayer

In view of the facts and circumstances of the

present case, it is most respectfully prayed

that this Hon'ble Tribunal may kindly be

pleased to:

(i) Pass appropriate orders directing

the Respondents to forthwith supply to the

Petitioner the Minutes of all the Board Meetings

Company Appeal (AT) (Insolvency)No. 759 of 2019 2 of the Respondent No. 1 Company held from its

incorporation till date;

(ii) Pass appropriate orders directing the

Respondents to forthwith credit the

salary owed to the petitioner as CEO

and Managing Director of the

Respondent No. 1 Company for the

Months of February 2018 and March

2018;

(iii) Restrain the Respondent Nos. 2 to 7 from

taking any action or continuing to take any

action which is oppressive towards the

Petitioner in his capacity as Shareholder,

CEO and Managing Director of the

Respondent No. 1 Company or is in any

manner prejudicial to his rights and

interests in the Respondent No. 1

Company;

(iv) Restrain the Respondents from

amended the Articles of Association of the

Respondent No. 1;

Company Appeal (AT) (Insolvency)No. 759 of 2019 3

(v) Restrain the Respondents to utilize the funds

of the Respondent No. 1 for contesting the

present litigation;

(vi) Pass appropriate orders directing the

Respondents to include the Petitioner in all or

any activities/ actions with regard to the

management and conduct of the affairs and the

business of the Respondent No. 1 Company

which the Petitioner has the right to participate

in by virtue of him being a Shareholder, CEO

and Managing Director of the Respondent No. 1

Company including but not limited to full access

to the Petitioner's emails, operational emails,

right to access records and data and all other

rights being exercised by Respondent Nos. 2 to

7 by virtue of them being Directors of the

Respondent No. 1;

(vii) Restrain the Respondent Nos. 2 to 7 from

taking any action or continuing to take

any action which is in disobedience of the

order dated 22 March, 2018 passed by

this Hon'ble Tribunal;

Company Appeal (AT) (Insolvency)No. 759 of 2019 4

(viii) Pass such other appropriate orders against the

Respondent Nos. 2 to 7 as this Hon'ble Tribunal

may deem fit and proper as punishment for

acting in contempt of its order dated 22 March,

2018;

(ix) Such further order or orders be passed and/or

direction or directions be given as this Hon'ble

Tribunal may deem fit and proper."

5. In the said case, the 'Corporate Debtor' has filed its reply denying the claim

with prayer to reject the petition and made following averments: -

"5(i)-(ii) That the contents of Paragraph

5(i) and (ii) of the Petition are wrong and

denied. It is denied that the Respondent No.

2 to 7 continued to deny the Petitioner his

rights as a director of Respondent No. 1

Company by continuously denying him

access to Minutes of the Board Meeting of

Respondent No. 1 Company. It is denied

that the Petitioner has repeatedly requested

for the Minutes of Board Meeting, but to no

avail. It is most humbly submitted that the

Petitioner as on date still remains as the

Company Appeal (AT) (Insolvency)No. 759 of 2019 5 Board Director of the Respondent No. 1

Company and the Petitioner has complete

access to Minutes of Meeting of Respondent

No. 1 Company. It was also communicated

to the Petitioner by the Respondent No. 1

Company vide Email dated 20th March,

2018 that the Minutes of Meeting would be

made available to the Petitioner at the

earliest which has been confirmed by the

Petitioner under paragraph 5(iii) of the

present Application. Therefore, the

Applicant has filed the present Application

with a malafide intent to delay and deviate

the proceedings before this Hon'ble

Tribunal and cause damage and losses to

the Respondents. It is denied that the

Applicant vide email dated 24th March,

2018 requested the Minutes of Board

Meeting in view of his status as a Managing

Director of Respondent No. 1Company. It is

on the other hand submitted that the

Applicant had voluntarily resigned

from his position as the CEO and

Company Appeal (AT) (Insolvency)No. 759 of 2019 6 Managing Director of the Company at

the Board Meeting dated 7th March,

2018 and the same was accepted and

confirmed by Respondent No. 2-7 vide

Board Meeting dated 31st March, 2018.

Therefore, owing to voluntarily

resigning from his position as the

Managing Director of the Respondent

No. 1 Company, the Applicant ceases to

be the Managing Director of the

Respondent No.1 Company. Therefore,

it is wrongly stated by the Petitioner/

Applicant before this Hon'ble Court that the

petitioner / applicant requested for the

copies of the Minutes of Board Meeting in

view of his status as a Managing Director."

6. Learned counsel appearing on behalf of the 1st Respondent submitted that

the 1st Respondent is a shareholder of the Company and was also the CEO &

Director of the 'Corporate Debtor'. He was not paid salary for certain months and

inspite of Demand Notice u/s 8(1) the 'Corporate Debtor' defaulted to pay.

8. From the record, we find that the Company Petition under Section 241 and

242 of the Companies Act, 2013 filed by the 1st Respondent is pending before the

Company Appeal (AT) (Insolvency)No. 759 of 2019 7 'National Company Law Tribunal'. In the said case, application for interim relief

in CA No. 278/PB/2018 filed by the 1st Respondent has been heard and the order

has been reserved on 14th May, 2018.

9. During the pendency of the aforesaid application for payment of salary,

without waiting for decision of NCLT, the 1st Respondent issued Demand Notice

u/s 8(1) of the 'I&B' Code on 26th July, 2018 for the same amount as claimed and

prayed for before the Tribunal in a Petition u/s 241,242, which has already been

disputed by the 'Corporate Debtor'.

11. Though the Adjudicating Authority ('National Company Law Tribunal')

Principal Bench has noticed that the petition u/s 241, 242 and 244 of the

Companies Act, 2013 with prayer for payment of salary is pending before the

'National Company Law Tribunal' and the 'Corporate Debtor' in the said case

disputed the entitlement of 1st Respondent to get salary of the said period, the

Adjudicating Authority has admitted the application u/s 9.

12. From the facts as detailed above, as we find that there is a pre-existence of

dispute with regard to salary payable to the 1st Respondent and matter is pending

for decision before the 'National Company Law Tribunal', New Delhi prior to

issuance of Demand Notice u/s 8(1), we hold that the application u/s 9 of the

'I&B' Code filed by the 1st Respondent was not maintainable.

13. Learned Counsel appearing on behalf of the 1st Respondent submitted that

no Suit or Arbitration is pending. But the fact that the same claim made by 1st

Company Appeal (AT) (Insolvency)No. 759 of 2019 8 Respondent is pending for decision before the 'National Company Law Tribunal',

having not disputed, we hold that there is a pre-existing dispute.

14. For the reasons aforesaid, we set aside the impugned order dated 3rd July,

2019 passed by the Adjudicating Authority ('National Company Law Tribunal')

Principal Bench, New Delhi in Company Petition No. (IB)-1218 (PB)/2018 and

dismiss the application u/s 9 of the 'I&B' Code filed by the 1st Respondent. The

Company Petition No. (IB)-1218 (PB)/2018 is dismissed.

15. In effect, the order (s) passed by Ld. Adjudicating Authority appointing

'Interim Resolution Professional', declaring moratorium etc. pursuant to

impugned order of admission and action taken by the 'Resolution Professional',

including the advertisement published in the newspaper; calling for applications

and all such actions are declared illegal and are set aside. The application

preferred by the Respondent under Section 9 of the 'I&B Code' having been

dismissed, the Adjudicating Authority will now close the proceeding. The

'Corporate Debtor' is released from all the rigour of law and is allowed to function

independently through its Board of Directors with immediate effect.

16. The Adjudicating Authority will fix the fee of 'Interim Resolution

Professional' and the cost incurred by him and the 'Corporate Debtor' will pay

the fees and costs within the period as may be fixed by the Adjudicating

Authority.

17. One Mr. Nikhil orally sought permission to intervene without filing a

petition and without any Valakalatnama on behalf of one 'Tabset Equity Holding Company Appeal (AT) (Insolvency)No. 759 of 2019 9 Ltd.', that it is also a shareholder of the 'Corporate Debtor' as also a 'Financial

Creditor', but we are not inclined to make any observation in this appeal as we

hold that the application u/s 9 of the 'I&B' code was not maintainable in view of

pre-existing dispute.

The appeal is allowed with aforesaid observations and directions.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice A. I. S. Cheema] Member (Judicial)

[Kanthi Narahari] Member (Technical)

New Delhi

2nd September, 2019

ss

Company Appeal (AT) (Insolvency)No. 759 of 2019 10