# In the matter of Applied Electro-Magnetic Pvt. Ltd. CP no. (IB)-334 (ND)-2017

> NCLT judgment dated 2017-10-26. Citation: TCN-2017-NCLT-00259. The case involves an application filed by Nitin Gupta, an operational creditor, against M/s…

- **Court:** NCLT
- **Order date:** 26 Oct 2017
- **Citation:** TCN-2017-NCLT-00259
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/applied-electro-magnetic-pvt-ltd-cp-no-ib-334-nd-2017-b1979338

## Summary

### Background

The case involves an application filed by Nitin Gupta, an operational creditor, against M/s Applied Electro-Magnetic Pvt. Ltd., the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). Nitin Gupta was employed by the corporate debtor as Manager R&D (Railway Projects). He claims that the corporate debtor failed to pay his full salary since 2008, resulting in accumulated unpaid salaries amounting to Rs. 46,77,124/-. The applicant sent a demand notice under Section 8 of the Code, and filed the application after the stipulated period. The corporate debtor raised objections, including limitation, existence of a dispute, and non-compliance with Section 9(3)(c) of the Code.

## Facts

Nitin Gupta, the operational creditor, was employed by M/s Applied Electro-Magnetic Pvt. Ltd., the corporate debtor, as Manager R&D (Railway Projects). His salary was revised/increased in 2009, 2010, and 2013. The payment of salary was not systematic, leading to accumulation of unpaid salaries. The operational creditor claimed Rs. 46,77,124/- towards unpaid salaries, along with interest at 18% per annum. The operational creditor sent a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016, on 17.08.2017. The corporate debtor raised objections, including limitation, existence of a dispute pending before the Deputy Labour Commissioner, and non-compliance with Section 9(3)(c) of the Code. The corporate debtor admitted that Rs. 28,84,160/- was due

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## Issues and analysis

### Issue 1: Whether the application filed by the operational creditor is maintainable under Section 9 of the …

**Ratio:** Section 5(21) of the Code defines 'Operational Debt' as a claim in respect of the

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**Reasoning:** The court reasoned that the applicant, being in employment with the respondent company

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**Interpretation:** The definitions of 'Operational Debt' and 'Operational Creditor' are

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**Application:** Since the respondent Corporate Debtor has admitted that Operation Debt to the

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## Parties

- **Judges:** Ina Mal…; S. K. MOH…
- **Appellants:** Nitin G…
- **Respondents:** M/s Applied…
- **Advocates:** R. K. G…; M.P. S…; +2 more

## Timeline

- **2008-05-07 — Appointment of…**: Nitin Gupta was appointed as Manager R&D (Railway Projects) by M/s Applied…
- **2017-08-17 — Demand N…**: Applicant sent a demand notice to the respondent company under Section 8 of the Code read…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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