Non-payment of bonus due to non-fulfillment of certain terms and conditions would be a pre-existing dispute: NCLAT

Case Details: Victor Vanya Bandlamudi v. Mercados Energy Markets India (P.) Ltd. - [2021] 129 taxmann.com 292 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • A.I.S. Cheema, Judicial Member and V.P. Singh, Technical Member. 
  • Arun Saxena and Ms. Nalini Singh, Advs. for the Appellant.
  • Sourav Roy, Kaushal Sharma and Prabudh Singh, Advs. for the Respondent.

Facts of the Case

The appellant joined the corporate debtor as a senior manager in January 2017. He requested the corporate debtor to accept his resignation and relieve him by 31-1-2019. He was relieved with effect from 31-3-2019. The appellant thereafter sent three reminders requesting the corporate debtor to discharge bonus for the financial year 2018-19 but no such payment was made.

The appellant applied for initiation of CIRP against the corporate debtor under section 9. In reply, the corporate debtor stated that there existed a pre-existing dispute prior to the issue of notice under section 8 regarding bonus as according to discussion between the parties the bonus was to be given to the appellant if certain conditions related to the extension of the notice period and execution of a retainership agreement were fulfilled by the appellant.

The corporate debtor claimed that since those conditions were not fulfilled, the bonus was not payable to the appellant. The Adjudicating Authority held that there was a pre-existing dispute between the parties and, therefore, the CIRP application was to be dismissed.

NCLAT Held

On appeal, the Appellate Tribunal held that the observations of the Adjudicating Authority in the impugned order were not out of place. The appellant may be able to pursue his remedies in any other forum if enforceable under law. However, as far as provisions of the IBC are concerned, which are more concerned with the resolution of the company, there is no error in the impugned order so as to interfere in the appeal.

Case Review

• • Victor Vanya Bandlamudi v. Mercados Energy Markets India (P.) Ltd. [2021] 129 taxmann.com 291 (NCLT – New Delhi) (para 8) affirmed

List of Cases Referred to

• • Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017] 85 taxmann.com 292/144 SCL 37 (SC) (para 3).