# In the matter of Karvy Digikonnect Limited

> NCLT judgment dated 2024-01-08. Citation: TCN-2024-NCLT-03252. The case involves an application filed by Mohit Naman, a former employee of M/s Karvy…

- **Court:** NCLT
- **Order date:** 8 Jan 2024
- **Citation:** TCN-2024-NCLT-03252
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karvy-digikonnect-limited-99c25f7c

## Summary

### Background

The case involves an application filed by Mohit Naman, a former employee of M/s Karvy Digikonnect Limited, along with other authorized representatives, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Karvy Digikonnect Limited. The application alleges that the corporate debtor failed to pay outstanding salaries and benefits amounting to Rs. 1,60,98,712. The respondent, Karvy Digikonnect Limited, admitted to owing a lesser amount, claiming that the total dues including bonus, PF, TDS, and gratuity were Rs. 79,99,846, which is below the minimum threshold of Rs. 1 crore required for initiating CIRP under Section 4 of the IBC. The respondent also raised the issue of Section 10A of the

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## Facts

Mohit Naman and other former employees of Karvy Digikonnect Limited filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Karvy Digikonnect Limited due to unpaid salaries and benefits. The applicants claimed an outstanding amount of Rs. 1,60,98,712. Karvy Digikonnect Limited admitted to owing a lesser amount of Rs. 79,99,846, arguing that the claimed amount included dues other than outstanding salary, such as bonus, PF, TDS, and gratuity. The respondent also argued that some of the salary dues fell within the period covered by Section 10A of the IBC, which prohibits the initiation of CIRP for defaults occurring between March 25, 2020, and March 24, 2021. The

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the IBC is maintainable given the respondent's argument …

**Ratio:** Section 4 of the IBC stipulates a minimum

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**Reasoning:** The tribunal found that after excluding the salary dues falling under the Section 10A

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**Interpretation:** Section 4 of the IBC sets a financial threshold for initiating CIRP, and if the

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**Application:** Since the outstanding debt, after excluding the amount covered by Section 10A,

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## Parties

- **Judges:** HRI MAHENDRA…; RAHUL BHA…
- **Appellants:** MOHIT N…
- **Respondents:** M/s KARVY…

## Timeline

- **1992-07-13 — Incorporation of…**: The Respondent Company M/s Karvy Digikonnect Limited was incorporated under the…
- **2020-03-01 — Default in Salary…**: The Corporate Debtor stopped payment of salary and all other benefits to the operational…

## 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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