N. SUBRAMANIAN versus M/S ARUNA HOTELS LTD. & ANR.

Citation: [2021] 2 S.C.R. 545 · Decided: 03-03-2021 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
545
N. SUBRAMANIAN
v.
M/S ARUNA HOTELS LTD. & ANR.
(Civil Appeal No. 187 of 2019)
MARCH 03, 2021
[ROHINTON FALI NARIMAN, B. R. GAVAI AND
HRISHIKESH ROY, JJ.]
Insolvency and Bankruptcy Code, 2016 – s.9 – Arrears of
salary – claim of – Appellant filed an application u/s.9 of the 2016
Code and averred that a sum of Rs.1.87 Crores was owed to him,
being the arrears of salary from the year 1998 till 2013 when he
retired from service, and that several acknowledgments of liability
have been given of the arrears payable, the last of which was by a
letter dated 30.09.2014 by the erstwhile Managing Director of the
respondent-company – National Company Law Tribunal (NCLT)
setting out the acknowledgement of liability letter dated 30.09.2014,
went on to state that the principal amount of Rs. 1.06 Crores being
admitted, a case was made out for admission – National Company
Law Appellate Tribunal (NCLAT) set aside the NCLT order and
referred to a letter by the Employees Provident Fund Organisation
dated 13.04.2016 and stated that the Appellant’s claim was settled
as a result of that letter – Before the Supreme Court, respondent-
company contended that claim of the appellant is time barred – On
appeal, held: The fact that from the date of the last acknowledgement
i.e. 30.09.2014 till the date on which the petition before the NCLT
was filed i.e. 27.07.2017, three years have not elapsed – Therefore,
at least to the extent of an acknowledgement made by the then
Managing Director of the Corporate Debtor, the arrears of salary
due for a period of at least 3 years prior to 30.09.2014 would
certainly be within limitation, and therefore payable to the Appellant
– Employees Provident Fund letter dated 13.04.2016 was only a
red-herring, and has nothing to do with the arrears of salary which
had to be paid – This being the case, the NCLT judgment is correct
in admitting the s. 9 application by the Appellant – Consequently,
the NCLT judgment is restored to the file – The impugned NCLAT
judgment is accordingly set aside.
[2021] 2 S.C.R. 545
545
A
B
C
D
E
F
G
H
546
SUPREME COURT REPORTS
[2021] 2 S.C.R.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 187
of 2019
From the Judgment and Order dated 16.07.2018 of the National
Company Law Appellate Tribunal, in CA (AT) (Insolvency) No. 290 of
2017.
With
Civil Appeal Diary Nos. 34841, 34836, 34839 of 2018
Ritin Rai, Mohan Parasaran, Sr. Advs., S. Santanam Swaminadhan,
Kartik Malhotra, Ms. Abhilasha Shrawat, Mrs. Aarthi Rajan, A. Karthik,
Ms. Aditi Dani, Ashwin Kumar D.S., Vishnu Kumar, Surbhi Mehta, Advs.
for the appearing parties.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
CIVIL APPEAL NO. 187 OF 2019
1. I.A. No. 163654 of 2019 for intervention is dismissed.
2. The present appeal is filed by an erstwhile employee of the
Corporate Debtor, i.e. the Respondent No.1 Company. The Appellant
joined the Corporate Debtor as a Personal Assistant on 01.01.1983, and
over the years received several promotions, including to Manager-
Administration. His final designation before he left from service in 2013
was Public Relations Manager.
3. This appeal arises from an application that was made by the
Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016
[“IBC”] dated 21.07.2017. In this application, the Appellant averred
that a sum of Rs.1.87 Crores was owed to him, being the arrears of
salary from the year 1998 till 2013 when he retired from service, and
that several acknowledgments of liability have been given of the arrears
payable, the last of which was by a letter dated 30.09.2014 by the
erstwhile Managing Director of the Company. The Corporate Debtor
replied to the aforesaid Section 9 application denying any liability and, in
any case, stated that claims that are made by the Appellant are time-
barred. The National Company Law Tribunal [“NCLT”] in its judgment
dated 17.11.2017, after setting out the facts and, in particular, setting out
the acknowledgement of liability letter dated 30.09.2014, went on to
state that the principal amount of Rs. 1.06 Crores being admitted, a case
A
B
C
D
E
F
G
H
547
has been made out for admission. It also referred to a certain “payment
voucher” (which was relied upon by the learned counsel for the
Company), stating that this voucher was merely a red-herring, and in
any case could not be relied upon. According to the NCLT, even a cursory
look at the said voucher by the naked eye would show that the name of
the Appellant has been filled 

Excerpt shown. Read the full judgment & AI analysis in Lexace.