IBC - Ramesh Kymal v M/s Siemens Gamesa Renewable Power Private Limited

► Appeal Number : 4050/2020

► Date : Feb 09, 2021

► Court : Supreme Court of India

► Name of Act : Insolvency and Bankruptcy Code, 2016

► Section : Section 10A of Insolvency and Bankruptcy Code, 2016

► In favour of : M/s Siemens Gamesa Renewable Power Private Limited

► Cases referred : Queen v. Burah, Block v. Hirsh, Swiss Ribbons (P) Ltd. v. Union of India, ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta.

► Name of Judge : MR Shah, Dr Dhananjaya Y Chandrachud

► Order:

Brief/Facts of the case: Ramesh Kymal, former Chairman and Managing Director of the Company had resigned in January 2020 and served his notice period of 60 days until 23rd March 2020. However, he agreed to continue his position till 30th April 2020. The Company failed to pay the pending sum to the former employee, in response to which he applied to NCLT for initiation of Corporate Insolvency Resolution Process (“CIRP”).

Both NCLT and NCLAT rejected his application citing Section 10A. In turn, he applied to Supreme Court with his plea that the salary was due on 23rd March 2020 which was well before the time as specified under Section 10A of the Code. Section 10A was introduced on 5th June retrospectively stating that all defaults occurring after 25th March 2020 until such period as may be specified (maximum one year) will not attract the institution of resolution process.

Appellant’s contention that the actual date of default ought to be 23rd March 2020 was rejected on the basis of a strict interpretation of Section 8(1) which requires the Operational Creditor to deliver a demand notice asking for repayment.

Supreme Court Order: The Supreme Court, therefore, dismissed the appellant’s application and upheld the NCLAT’s judgment that Section 10A was applicable to the default in the impugned case.

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