# In the matter of Tonk Water Supply Limited CP No. (IB)- 329-9-JPR-2019

> NCLT judgment dated 2022-09-29. Citation: TCN-2022-NCLT-00897. Shashi Kant Sharma, the applicant/operational creditor, filed an application under Section 9 of…

- **Court:** NCLT
- **Order date:** 29 Sept 2022
- **Citation:** TCN-2022-NCLT-00897
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tonk-water-supply-limited-cp-no-ib-329-9-jpr-2019-16c9e45e

## Summary

### Background

Shashi Kant Sharma, the applicant/operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against PSP Dynamic Private Limited, the respondent/corporate debtor, for alleged default in repayment of an operational debt amounting to Rs. 1,62,926. The applicant claimed unpaid salary and expenses for the period he was employed with the corporate debtor. The corporate debtor contested the application, asserting a pre-existing dispute and non-compliance with company policies regarding expense reimbursement and resignation notice period.

## Facts

Shashi Kant Sharma (Applicant) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against PSP Dynamic Private Limited (Corporate Debtor) for an alleged default of Rs. 1,62,926. The applicant was employed as Vice-President with the Corporate Debtor from 15.06.2017. The applicant claimed unpaid salary for September 2018 and 6 days of October 2018, along with unreimbursed expenses from June 2018 to October 2018. The applicant resigned on 09.10.2018, effective 06.10.2018, without serving a one-month notice period as required by the appointment letter. The Corporate Debtor argued that the applicant failed to comply with company policies regarding expense reimbursement, and that there

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## Issues and analysis

### Issue 1: Whether there is an operational …

**Ratio:** The existence of an operational debt is a prerequisite for initiating CIRP under Section

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**Reasoning:** The Adjudicating Authority found that the applicant failed to serve the required

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**Interpretation:** The appointment letter's termination clause requires either one month's notice

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**Application:** Since the applicant did not provide the required notice and failed to properly

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Appellants:** Shashi Kant…
- **Respondents:** PSP DYNAMIC PVT…
- **Advocates:** Nikhil…; Akansha…

## Timeline

- **2017-06-15 — Employment St…**: Applicant started working…
- **2017-09-20 — Appointment Letter…**: Appointment letter…

## 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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