# In the matter of CEO Lounge Private Ltd. CP (IB) No.526-Chd-Hry-2019

> NCLT judgment dated 2023-05-30. Citation: TCN-2023-NCLT-03134. The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 30 May 2023
- **Citation:** TCN-2023-NCLT-03134
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ceo-lounge-private-ltd-cp-ib-no526-chd-hry-2019-158e993a

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by Raju Sarin (Operational Creditor) against M/s CEO Lounge Private Ltd. (Corporate Debtor) seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claims unpaid salary and expenses. The Corporate Debtor disputes the claim, alleging pre-existing disputes, poor performance, and failure to submit proper invoices. The Adjudicating Authority is considering whether the demand notice was duly served, whether the operational debt was disputed, and whether the application is within limitation.

## Facts

Raju Sarin, the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s CEO Lounge Private Ltd., the Corporate Debtor, seeking to initiate CIRP for unpaid salary and expenses amounting to Rs. 10,25,420/-. Sarin was employed by the Corporate Debtor since 23.11.2017. He claimed salary and expenses, including a bonus. The Corporate Debtor disputed the claim, alleging that Sarin's performance was poor, he failed to meet sales targets, and he did not submit proper invoices for reimbursements. The Corporate Debtor also argued that Sarin was informed about the unjustified claims via email dated 16.10.2018. A demand notice was issued on 15.04.2019, and the Corporate Debtor replied on 25.04.2019, stating that Sarin was not

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## Issues and analysis

### Issue 1: Whether the demand notice was duly …

**Ratio:** The demand notice must be served upon the corporate debtor as per the requirements of

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**Reasoning:** The Adjudicating Authority noted that the demand notice dated 15.04.2019 was delivered to

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**Interpretation:** The service of the demand notice is a prerequisite for initiating CIRP under

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**Application:** In this case, the demand notice was served, and the corporate debtor responded,

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Raju S…
- **Respondents:** M/s CEO Lounge…

## Timeline

- **2017-11-23 — Operational Creditor's…**: Operational Creditor was employed by the…
- **2018-09-01 — Salary Re…**: Director unilaterally changed the terms of employment in the third week of September and…

## 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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