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

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

The last acknowledgement of liability dated 30.09.2014 meant that less than three years elapsed until the Section 9 petition was filed on 27.07.2017; therefore arrears corresponding to at least three years prior to 30.09.2014 were within limitation and the NCLT was correct to admit the Section 9 petition, appoint an Interim Resolution Professional and impose moratorium; the NCLAT’s order setting aside the NCLT judgment was therefore set aside and the NCLT judgment restored.

Parties
Appellant / Operational Creditor / Erstwhile Employee: N. Subramanian; Respondent / Corporate Debtor: M/s Aruna Hotels Ltd.
Jurisdiction
India
Judgment Date
03 March 2021
Procedural Posture
Civil Appeal No. 187 of 2019 / Appeal to the Supreme Court From National Company Law Appellate Tribunal Judgment Dated 16.07.2018
Outcome
Appeal allowed; impugned NCLAT judgment set aside; NCLT judgment admitting the Section 9 petition restored
Legal Topics
Section 9 IBC, Limitation, Acknowledgement of Liability, Moratorium Under Section 14 IBC
Insolvency and Bankruptcy Employment Law Section 9 IBC Limitation Acknowledgement of Liability Moratorium Under Section 14 IBC

Case Brief

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Parties

N. Subramanian

Appellant / Operational Creditor / Erstwhile Employee

M/s Aruna Hotels Ltd.

Respondent / Corporate Debtor

Procedural Posture

Civil Appeal No. 187 of 2019 / Appeal to the Supreme Court From National Company Law Appellate Tribunal Judgment Dated 16.07.2018

Legal Issues

  1. 1 Whether the appellant’s claim for arrears of salary was time-barred by limitation
  2. 2 Whether acknowledgements of liability (letters dated 30.09.2006, 30.06.2013, 30.09.2014) revived or prevented limitation from running
  3. 3 Whether there existed a 'dispute' such as to defeat admission of a Section 9 IBC petition

Ratio Decidendi

The last acknowledgement of liability dated 30.09.2014 meant that less than three years elapsed until the Section 9 petition was filed on 27.07.2017; therefore arrears corresponding to at least three years prior to 30.09.2014 were within limitation and the NCLT was correct to admit the Section 9 petition, appoint an Interim Resolution Professional and impose moratorium; the NCLAT’s order setting aside the NCLT judgment was therefore set aside and the NCLT judgment restored.

Court Disposition

Appeal allowed; impugned NCLAT judgment set aside; NCLT judgment admitting the Section 9 petition restored

Orders

  • I.A. No. 163654 of 2019 for intervention dismissed
  • Impugned NCLAT judgment dated 16.07.2018 set aside