# In the matter of UNICO Leather Product Pvt. Ltd. CP (IB) No.78-Chd-J&K-2020

> NCLT judgment dated 2022-09-06. Citation: TCN-2022-NCLT-01154. Ms. K. Nagavalli, an employee of M/s UNICO Leather Product Pvt. Ltd., filed a petition under…

- **Court:** NCLT
- **Order date:** 6 Sept 2022
- **Citation:** TCN-2022-NCLT-01154
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/unico-leather-product-pvt-ltd-cp-ib-no78-chd-jk-2020-098203ae

## Summary

### Background

Ms. K. Nagavalli, an employee of M/s UNICO Leather Product Pvt. Ltd., filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s UNICO Leather Product Pvt. Ltd. The operational creditor claimed unpaid salary, bonus, earned leave wages, notice pay, and gratuity amounting to Rs. 2,74,964. The corporate debtor admitted to the transactions but cited losses due to the COVID-19 pandemic as the reason for non-payment. The Adjudicating Authority considered issues related to the service of demand notice, the existence of a pre-existing dispute, and limitation.

## Facts

Ms. K. Nagavalli, an employee of M/s UNICO Leather Product Pvt. Ltd., filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against her employer, M/s UNICO Leather Product Pvt. Ltd. She claimed that the corporate debtor failed to pay her full salary for November and December 2017, and completely stopped paying her from January 2018 to June 2018. Additionally, she claimed unpaid bonus, earned leave wages, notice pay, and gratuity. The total amount in default was Rs. 2,74,964, with the date of default being 01.11.2017. A demand notice was issued on 26.11.2019 and received by the corporate debtor on 03.12.2019. The corporate debtor admitted to the transactions but attributed the non-payment

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## Issues and analysis

### Issue 1: Whether the demand notice in Form 3 …

**Ratio:** A demand notice must be properly served to

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**Reasoning:** The petitioner provided copies of registered postal receipts and tracking reports showing

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**Interpretation:** Proper service of demand notice is a prerequisite for initiating CIRP. Delivery

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**Application:** The demand notice was properly served as it was delivered to the Chennai office

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** K. Naga…
- **Respondents:** M/s UNICO Leather…

## Timeline

- **1986-08-29 — Incorporation of…**: M/s UNICO Leather Product Private Limited was…
- **1990-01-01 — Operational Creditor…**: The corporate debtor engaged 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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