# In the matter of Vistar Construction Pvt. Ltd. Company Petition No. (IB)-521(ND)-2017

> NCLT judgment dated 2018-12-05. Citation: TCN-2018-NCLT-00181. The case involves an application filed by Mr. Narender Sharma, an operational creditor, against…

- **Court:** NCLT
- **Order date:** 5 Dec 2018
- **Citation:** TCN-2018-NCLT-00181
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vistar-construction-pvt-ltd-company-petition-no-ib-521nd-2017-66499a2a

## Summary

### Background

The case involves an application filed by Mr. Narender Sharma, an operational creditor, against Vistar Construction Pvt. Ltd., the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiation of the Corporate Insolvency Resolution Process (CIRP). Mr. Sharma claimed unpaid salary dues of Rs. 12,22,518/-. Vistar Construction contested the application, citing disputes over the resignation of Mr. Sharma, alleged failure to hand over documents, and financial losses incurred due to his actions. The company also filed a civil suit for recovery against Mr. Sharma.

## Facts

Mr. Narender Sharma, an operational creditor, applied for the post of Civil Engineer in Vistar Construction Pvt. Ltd. in September 2002 and was appointed in October 2002 with an initial salary of Rs. 1,20,000 per annum. His salary later increased, and his last drawn salary package was approximately 27 Lacs. On 27.05.2015, Mr. Sharma was allegedly forced to resign and was relieved from his post on 30.05.2015. A full and final settlement letter dated 01.06.2015 stated that Rs. 12,22,518 was payable to Mr. Sharma. Despite emails and calls, Vistar Construction failed to pay this amount. Mr. Sharma sent a legal notice on 04.04.2017 and a demand notice under Section 8 of the IBC on 21.07.2017. Vistar Construction replied to these notices, raising disputes. Mr. Sharma

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute existed between the operational creditor and the corporate debtor, …

**Ratio:** Section 5(6) of the IBC defines 'dispute' to include a suit or arbitration proceedings

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**Reasoning:** The court reasoned that the corporate debtor had raised disputes in its replies to the

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**Interpretation:** The term 'dispute' under Section 5(6) of the IBC is interpreted broadly to

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**Application:** In this case, the corporate debtor's replies to the demand notices and the

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## Parties

- **Judges:** Ina Mal…; S. K. MOH…
- **Appellants:** Sh. Narender…
- **Respondents:** Vistar Constructio…

## Timeline

- **2002-09-01 — Application for Civil…**: Mr. Narender Sharma applied for the post of Civil Engineer in Vistar Construction Pvt.…
- **2002-10-03 — Appointment…**: Mr. Narender Sharma received an appointment letter with a salary of Rs. 1,20,000 per…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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