# In the matter of Cals Refineries Ltd. (Seth Thakurdas Khinvraj Rathi Vs. Cals Refineries Ltd.) CA Nos. 230 & 231-2018 in (IB)-447-(ND)-2017

> NCLT judgment dated 2018-07-18. Citation: TCN-2018-NCLT-01122. CAs 230/2018 and 231/2018 were filed by the CFO and CS of the Corporate Debtor, seeking relief…

- **Court:** NCLT
- **Order date:** 18 Jul 2018
- **Citation:** TCN-2018-NCLT-01122
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/cals-refineries-ltd-seth-thakurdas-khinvraj-rathi-vs-cals-refineries-ltd-ca-nos-ca00d3b3

## Summary

### Background

CAs 230/2018 and 231/2018 were filed by the CFO and CS of the Corporate Debtor, seeking relief from their services due to non-receipt of remuneration since November 2017. The Resolution Professional (RP) opposed the prayer, stating that the Corporate Debtor, being a listed company, is obligated to provide periodic reports to the Bombay Stock Exchange and that the RP would be held liable for any lapses. The RP requires the assistance of the CFO and CS, who are key personnel.

## Facts

The CFO and CS of the Corporate Debtor filed applications (CAs 230/2018 and 231/2018) to be relieved from their services because they had not received remuneration since November 2017. The RP opposed this, arguing that the Corporate Debtor is a listed company required to submit periodic reports to the Bombay Stock Exchange, and the RP needs the CFO and CS's assistance. The Income Tax Department has a significant claim, potentially comprising 99.80% of the COC's voting power, which could reduce the Operational Creditor to a minuscule number. The RP stated that SEBI and SFIO were notified. The court also considered directions from SEBI dated December 31, 2014, and whether they had been acted upon.

## Issues and analysis

### Issue 1: Whether the CFO and CS of the Corporate Debtor should be relieved from their services due to …

**Ratio:** Employees cannot be expected to be bound to their jobs without receiving monthly

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**Reasoning:** The court reasoned that it is unfair to expect employees to continue working without

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**Interpretation:** This interprets the implicit contractual obligation of employers to pay

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**Application:** The court applied this principle to the specific facts, noting that the CFO and

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## Parties

- **Judges:** DEEΡΑ KR…; Ina Mal…
- **Appellants:** M/s. Seth…
- **Respondents:** Cals Refineries…; M/s. Cals…

## Timeline

- **2017-11-01 — Non-receipt of…**: CFO and CS of the Corporate Debtor…
- **2018-07-18 — Hearing…**: Hearing before the…

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