# In the matter of APITCO Limited

> NCLT judgment dated 2024-01-02. Citation: TCN-2024-NCLT-03363. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code (IBC),…

- **Court:** NCLT
- **Order date:** 2 Jan 2024
- **Citation:** TCN-2024-NCLT-03363
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/apitco-limited-6ff2d4cf

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, by several employees of M/s.APITCO (the Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP) due to unpaid salaries. The applicants, acting through a General Power of Attorney (GPA), claimed a total due of Rs. 2,44,49,237/-, including principal and interest. The Corporate Debtor contested the application, citing a pre-existing dispute regarding the amount owed and arguing that the individual claims of the employees did not meet the threshold of Rs. 1 crore required under Section 4 of the IBC. The Corporate Debtor also questioned the validity of the GPA.

## Facts

Several former employees of APITCO Limited, acting through a General Power of Attorney (GPA), filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against APITCO Limited due to unpaid salaries. The total amount claimed was Rs. 2,44,49,237/-, including principal and interest. The employees had not been paid salaries for varying periods, mostly from October 2019 onwards, leading some to resign and others to be superannuated. A demand notice was served on the Corporate Debtor on 01.12.2022, to which the Corporate Debtor replied on 13.12.2022, raising various grounds and requesting reconciliation. The applicants provided documents to support their claims, including appointment letters,

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## Issues and analysis

### Issue 1: Whether there is a bonafide and genuine dispute …

**Ratio:** The existence of a bonafide and genuine dispute precludes the initiation of CIRP under

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**Reasoning:** The NCLT found that the Corporate Debtor had raised valid concerns regarding the exact

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**Interpretation:** A 'dispute' under the IBC encompasses a genuine disagreement or contestation

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**Application:** In this case, the Corporate Debtor's request for reconciliation and the lack of

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Nethi Jagadish…
- **Respondents:** APITCO Li…

## Timeline

- **2019-10-01 — Non-payment of…**: Most of the applicants were not paid…
- **2022-12-01 — Demand N…**: Applicants served a demand…

## 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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