Operational debt claimed by applicant for unpaid salary dues - CIRP initiated

NCLT Chennai Initiates CIRP Against Viprah Technologies Over Unpaid Salary Dues Tribunal Finds No Bona Fide Dispute; Acknowledges Operational Debt and Appoints IRP

In a significant ruling, the National Company Law Tribunal (NCLT) in Chennai has initiated the Corporate Insolvency Resolution Process (CIRP) against Viprah Technologies Limited after finding the company liable for unpaid salary dues to its former Director of Operations, Arul Prasad Senniappan. The tribunal's decision comes after an extensive examination of the evidence, including acknowledgment of debt in company records and meetings.

The case, filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, involved a claim by Senniappan for unpaid dues amounting to Rs. 10.50 lakhs. Despite Viprah Technologies' assertions of a pre-existing dispute and claims of misconduct by Senniappan, the tribunal found no substantial evidence to support these allegations. The tribunal noted that the company had acknowledged the debt in its minutes of meetings and annual returns, thus extending the limitation period under Section 18 of the Limitation Act, 1963.

The tribunal, led by Shri Jyoti Kumar Tripathi and Shri Ravichandran Ramasamy, rejected Viprah Technologies' arguments regarding the alleged misconduct and breach of fiduciary duties by Senniappan, noting that these claims were not substantiated by any formal action prior to the demand notice. The tribunal emphasized that mere allegations without contemporaneous formal proceedings do not constitute a bona fide dispute.

Furthermore, the tribunal dismissed the company's plea of limitation, stating that the acknowledgment of the debt effectively extended the limitation period, making the petition filed in October 2019 well within time. Additionally, the tribunal found that the operational debt surpassed the statutory threshold applicable before March 2020, confirming the petition's maintainability.

In light of these findings, the tribunal has appointed CA S. Prabhu as the Interim Resolution Professional (IRP) to oversee the CIRP. The tribunal also imposed a moratorium, restricting suits, transfers, and recovery actions against the company during the insolvency proceedings.

This decision underscores the tribunal's commitment to ensuring that legitimate claims under the Insolvency and Bankruptcy Code are addressed, and that companies cannot evade financial liabilities through unsubstantiated claims of disputes. The ruling marks a crucial step in the insolvency process for Viprah Technologies, as it now moves towards resolution under the guidance of the appointed IRP.

Bottom Line:

Operational debt claimed by applicant for unpaid salary dues - Tribunal finds debt and default established, no pre-existing bona fide dispute, and petition within limitation - CIRP initiated against Corporate Debtor.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 4, 9, 14, 65; Limitation Act, 1963 Section 18

Arul Prasad Senniappan v. Viprah Technologies Limited, (NCLT)(Chennai) : Law Finder Doc Id # 2804501