Captain Sp Singh vs M/S. Himalayan Heli Services Ltd.

Hemant Kumar Sarangi, Member (T)

The present application is filed under Section 9 of Insolvency and Bankruptcy Code, 2016 (for brevity 'IBC, 20161, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules'), by Captain SP Singh (for brevity 'Applicant'), with a prayer to initiate the Corporate Insolvency Resolution Process (CIRP), against M/s. Himalayan Heli Services Private Limited (for brevity 'Respondent').

The Applicant, the Operational Creditor, is an individual, ex employee of the Corporate Debtor. Residing at 166, Army Enclave, Dheena, P.O. Jalandhar Cantt., Punjab 144005.

The Respondent, the Corporate Debtor, is a company incorporated on 06.07.1998, under the provisions of Companies Act, 1956 with CIN No. U63040DL1998PTC094836, having its registered office at 203, Allied Chamber 9, Local Shopping Centre, Lal Bahadur Shastri Marg, Madangir, New Delhi 110062.

As per the submissions of the Operational Creditor, the Corporate Debtor is engaged in the business of providing aviation consultancy and helicopter services at various pilgrimage sites in the country.

It is the case of the Operational Creditor that, he is a certified pilot and was engaged by the Corporate Debtor to fly the cheetah/ chetak helicopters, which were initially owned by the Corporate Debtor and subsequently, after signing of the Memorandum of Understanding ("MoU") dated 27.11.2012, the same were under the control of Border Security Force ("BSF"). The Operational Creditor catered his services and flew the helicopters owned by the Corporate Debtor during March, May and November, 2012. Thereafter, the Operational Creditor was appointed as a regular pilot vide employment letter dated 27.12.2012, upon signing the MoU dated 27.11.2012 and was offered Rs. 2,50,000/- per month, as a Corporate Salary, along with other benefits by the Corporate Debtor.

It is further stated that, the Operational Creditor was also entitled to various other benefits like leave encashment, reimbursement of mess bills, telephone bills, travel tickets, journey expenditure etc. During the period from 2012 to 2014, the Operational Creditor undertook his work diligently and was compensated by the Corporate Debtor at the rate of Rs. 15000/- for the days of unavailed leaves for the year 2013.

The Operational Creditor also states that, the Corporate Debtor as per the letter dated 22.03.2014, altered the terms of the employment of the Operational Creditor and the salary was revised to Rs.1,70,000/-, along with the revised days of flying and was also entitled for the amount of Rs.15,000/- per day, for every extra day of flying. The said revised terms of employment of the Operational Creditor lasted only for a period of 2 months and the Corporate Debtor, vide email dated 09.06.2014, informed the Operational Creditor regarding the alteration of the employment terms where the monthly salary was again revised to Rs. 2,50,000/-, per month.

The Operational Creditor further states that, he requested the Corporate Debtor to revise his monthly salary from Rs. 2,50,000/- to Rs. 3,00,000/-. However, the said request of the Operational Creditor was not entertained by the Corporate Debtor. However, the Corporate Debtor agreed and acknowledged, the entitlement of leave encashment of 25 days at the rate of Rs. 15,000/- per day, vide email dated 12.06.2014. The Operational Creditor accepted the said revised salary offered by the Corporate Debtor and continued providing its professional services to the Corporate Debtor.

It has also been stated by the Operational Creditor that, the MoU dated 27.11.2012, between the BSF and the Corporate Debtor, expired on 27.11.2014. The Corporate Debtor in the meanwhile requested the Operational Creditor to continue with the services, considering the said request the Operational Creditor bonafidely carried out the professional services till the time a new MoU was entered between the Corporate Debtor and the BSF to continue the service. The Corporate Debtor issued an invoice dated 08.01.2015 against the BSF for the payment of charges for a period of 13 days when the Operational Creditor rendered his services upon the expiration of the MoU. However, the said amount charged against the pilot charges were never paid to the Operational Creditor.

The Operational Creditor further states that, the services of the Operational Creditor were terminated on 30.08.2015, after the expiration of the notice period of 60 days. It is submitted that an amount of Rs. 1,66,268/- was due against the monthly salary of the notice period, Rs. 1,16,691/- against the imprest account, Rs. 8,55,000/- against the leave encashment for the year 2014 and Rs. 1,80,000/- against the leave encashment for the year 2015. It is submitted that the Corporate Debtor made a part payment of Rs. 2,72,090/- against the pending dues to the Operational Creditor.

In spite of various requests made and reminders sent by the Applicant, the respondent did not reply. On failure to pay the outstanding dues by the Respondent, the applicant sent a demand notice dated 16.03.2018, under Section 8 of the Insolvency and Bankruptcy Code, 2016 to the respondent, asking them to make the entire payment of Rs.13,17,959/- (Rupees Thirteen Lakhs Seventeen Thousand Nine Hundred Fifty Nine Only), within 10 days from receipt of the notice, failing which the applicant shall initiate the Corporate Insolvency Resolution Process ("CIRP") against the Respondent.

The Operational Creditor has annexed postal receipts, along with the tracking report indicating the delivery of the said demand notice at the registered office of the Corporate Debtor.

The Operational Creditor has stated that, after the delivery of demand notice sent under Section 8 of the Code, the Respondent has not given any reply to the said notice nor raised any dispute by way of notice of dispute. However, belatedly the Respondent has sent its reply raising its dispute.

In its notice of dispute, sent by the Corporate Debtor to the Operational Creditor, after receiving the demand notice, it is stated that, "that there is no debt which is owed by the company to your client. Since there is no debt or liability or obligation of the company in respect of the alleged claim made by your client in the notice under reply".

The applicant has stated that total debt due and payable is Rs.13,17,959/- (Rupees Thirteen Lakhs Seventeen Thousand Nine Hundred Fifty Nine Only). As per the Operational Creditor the default occurred on 30.08.2015, when the services of the Operational Creditor ended and the outstanding dues including the part of monthly salary and leave encashment became due and the Corporate Debtor failed to make the outstanding payment.

Hence, the application under section 9 of the IBC, 2016 was filed by the applicant to initiate CIRP. The applicant has also filed affidavit of service wherein, it states that in compliance of the order dated 11.06.2018, the respondent has been served through speed post on 19.06.2018. The Applicant further states that the respondent has also been served dasti on 11.06.2018 and through courier on 15.06.2018, at the registered address and the email id as per MCA records. The postal receipt along with the tracking report, dasti receiving, have been annexed along with the affidavit.

After the service of said notice, the Corporate Debtor has caused an appearance in the matter and has filed its reply. In its reply to the present section 9 application, the Corporate Debtor states that it has always disputed the claims raised by the Operational Creditor. The Operational Creditor after termination of his employment vide 30.06.2015 w.e.f 30.08.2015 for the first time raised the issue of non-payment of alleged dues dated 07.05.2016, which was duly replied on 10.05.2016, cleary raising a dispute pertaining to the alleged dues stating that the account of the Operational Creditor was fully settled as per the Corporate Debtor. As for the alleged claim of leave encashment of Rs. 10,35,000/-, it is an admitted position that Operational Creditor was appointed in terms of the letter of appointment dated 27.12.2012, which spells out all the terms and conditions of employment. It is an admitted position that there is no mention of any leave encashment in the said letter of appointment and therefore, there is no question of payment of any alleged leave encashment.

The Corporate Debtor further states that, the Operational Creditor took several leaves during the term of his employment, as a result of which his employment was terminated. The Operational Creditor joined services w.e.f 28.12.2012. At the time of employment, the Operational Creditor was not current (i.e., not qualified) for flying, on account of long gap during which the Operational Creditor was not flying, the Operational Creditor was provided with refresher training and the proficiency test in the initial few months of his employment with the Corporate Debtor so that the Operational Creditor is current (i.e., qualified) with the flying of the Lama Cheetah helicopter.

It has also been stated by the Corporate Debtor that in the year 2014, the Applicant has admittedly worked on full remuneration of Rs. 2,50,000t, wherein, he was required to work for full month for 10 months and for 2 months the Applicant was working for only 15 days a month having 15 days off every month and hence, in proportion the Operational Creditor is only allegedly entitled to 21 days of leave encashment if at all on the premises that such leaves were not availed off. The Operational Creditor again admittedly took several unscheduled leaves details of which are as under:

a. The Operational Creditor was on leave for four weeks w.e.f from 07.03.2014 onwards on account of being medically unfit. Since the Operational Creditor did not give proper notice of the same, the company was put to great inconvenience. In view of the above, it was agreed to change the terms of employment of 15 days of work and 15 days off. Despite this position, the Operational Creditor never updated the company regarding the date of joining, which is evident from the email dated 22.03.2014. Therefore, the Operational Creditor was on medical leave for 28 days in March-April 2014. Significantly, despite the non-professional attitude the company, while not obligated to, under the appointment letter, paid the entire salary for the period.

Therefore, while there was no provision of leave in the appointment letter and also subsequently, in emails exchanged in June, 2014, the Operational Creditor has taken several unscheduled leaves which• were much more than his entitlement. In Fact the company has a claim of Rs. 88,000/- and Rs. 2,55,000/-, the details of which are as follows:

a. The company was forced to accommodate Mr. Ashok Dutta in a hotel in Srinagar, incurring an expenditure of Rs. 88,000/- as the Applicant did not vacate the room despite repeated requests by the Company.

b. Rs. 2,55,000/- for the leaves taken in excess of the alleged leave encashment available in the calendar year 2014.

The Corporate Debtor further states that, the claim of non-payment of salary for the period of November 2012, is not maintainable, as it is the admitted fact that the appointment letter of the Operational Creditor dated 27.12.2012, clearly stipulates and mentions that the remunerations of the Operational Creditor will commence from 28.12.2012.

a. Further the alleged claim of Rs. 66,000/- towards ferry flight payment is also frivolous as neither the Applicant has placed on record any document to substantiate this payment along with the alleged legal notice nor any documents have been filed with the present petition.

b. Also, the alleged claim of Rs. 1,16,691/- on account of imprest account, the said claim is also frivolous as neither the Applicant has placed on record any document to substantiate this payment along with the alleged legal notice nor any documents have been file with the present petition.

Further the Hon'ble Supreme of India in Mobilox Innovations Private Limited vs. KirusaSortware Private limited has observed that-

"The adjudicating authority, when examining an application under Section 9 of the Act will have to determine:

(i) Whether there is an "operational debt" as defined exceeding Rs. 1 lakh? (See Section 4 of the Act)

(ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and

(iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute?

If any one of the aforesaid conditions is lacking, the application would have to be rejected.

Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(5) of the Act."

As per the reply filed by the Corporate Debtor, it can be inferred & concluded that there is a pre existing dispute between the Corporate Debtor and Operational Creditor, with regard to the quality of service provided and falls well within the definition of 'Dispute' as per Section 5(6)which is reproduced below:

"Dispute" includes a suit or arbitration proceedings relating to-(a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty.

It is further seen that the demand notice in the present case was issued under Section 8 (1) of the Code on 16.03.2018, Respondents have placed their earlier correspondences dated 22.03.2014 and beyond upto 07.05.2016, raising issues with respect to the quality of service being provided by the Operational Creditor. It is thus seen that the dispute was brought to the notice of the applicant prior to the issuance of the demand notice dated 16.03.2018 issued under Section 8 (1) of the Code.

As a sequel to the above discussion, this application fails and the same is hereby rejected and dismissed.

It is made clear that any observations made in this order shall not be construed as an expression of opinion on the merit of the controversy and the right of the applicant before any other forum shall not be prejudiced on account of dismissal of the instant application.

The registered office of respondent is situated in New Delhi and therefore this Tribunal has jurisdiction to entertain and try this application.

Let the copy of the order be served to the parties.