How to recover your earned money by IBC (Insolvency and Bankruptcy Code) 2016.

IBC (Insolvency and Bankruptcy Code) 2016 published in The Gazette of India on May 28, 2016 (Saturday), Sr. No. 37 by the Ministry of Law and Justice.

Secretary of Government of India: Dr. G. NARAYANA RAJU

A Code or we can say a legal weapon introduced by the Govt. of India to recover your earned money through IBC (Insolvency and Bankruptcy Code) 2016.

Here we will firstly discuss the some important question that will help you to understand the details which may beneficial for you.

Q 1. Who can approach and where he needs to approach?

Answer: Any person whose amount is due with the Company or LLP (minimum amount 100,000.00) can approach to NCLT (National Company Law Tribunal) under IBC (Insolvency and Bankruptcy Code) 2016 for Liquidation of that Company / LLP. Examples are written as following.

1. An Employee: A person who was / is working in a Company / LLP may file a petition if his dues are 100,000.00 or more.

2. Service Provider: Any service provider who has given the services and raised the Invoice but unable to recover the dues may file a petition if his dues are 100,000.00 or more.

3. Goods Provider: Any Goods Provider who has delivered the goods and raised the Invoice but unable to recover the dues may file a petition if his dues are 100,000.00 or more.

Q 2. Against whom a person can approach to NCLT under IBC?

Answer: Any person (eligible) can approach to NCLT under IBC against following written person

  1. Against Company (Private Limited / Limited / OPC)
  2. LLP (Limited Liability Partnership)

Q 3. What are the mandatory conditions under which we can file a petition?

Answer: There are basic three conditions which you need to take care.

1. Minimum amount must be 100,000.00 (One Lakh) only

2. Debt must be against Corporate (Private Limited / Limited / OPC / LLP)

3. Amount must be undisputed.

Q 4. What is the jurisdiction to file a petition before NCLT?

Answer: Jurisdiction as per the State in which Company (to whom we are filling a suit) is registered. As per that state connected NCLT shall be the jurisdiction to file the petition. Example is given as below.

1. Ashok who is service provider from Jaipur has given the services to ABC Private Limited Jaipur branch office and the company is registered in Gurgaon. Total Dues are 15,00,000.00.

– Mr. Ashok needs to file petition before NCLT Chandigarh Bench (Because Company is Registered in Gurgaon and connected NCLT bench is in Chandigarh for the state of Haryana)

2. Ankur who is resident of Delhi, South Ex and working in a Company XYZ Private Limited as a manger in Lucknow. Company is registered in Delhi. Total Salary due is 800,000.00

– Ankur needs to file petition before NCLT New Delhi bench (because Company is Registered in Delhi and connected NCLT bench is in Delhi).

Q 5. What is the benefit to approach NCLT instead of Courts?

Answer: This is very important point to understand ‘why NCLT & why not Court’. Some important points are written as following.

1. There is no need to pay Court Fee in NCLT (which is 5% or more in courts)

2. In Courts generally it takes 3-4 years but not in NCLT because in NCLT we don’t approach for recovery of money.

3. Less chances for settlement in less amount. etc.

Hence NCLT is better option for file the petition for Liquidation of Company

Here we have discussed the relevant points for the person whose money is due against the corporate.

So now there is no point to wait to get the earned money from the corporate.

Disclaimer: This article is only for knowledge purpose. This is not legally checked or verified please don’t take action only after reading this article. Kindly take proper advice from the concerned consultant(s).

(Author CS Aadra Shrotriya can be contacted at aadra.shrotriya11@gmail.com)

Author Bio

Qualification: CS
Company: N/A
Location: Gurgaon, Haryana, IN
Member Since: 28 Sep 2019 | Total Posts: 2

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14 Comments

  1. Dev says:

    We are an MSME and have some outstanding payments with an LLP firm. Can we file a complaint thru SAMADHAAN scheme of delayed payments for recovery of our dues

  2. Sunil Tavde says:

    There is a case filed against Arrow City Manhattan by 200 petitioners. In NCLT. I also want to file a case separately, with same content and plea. Lawyer is very expensive. Can I club my petition with existing case in NCLT, without a lawyer?

    1. Aadra Shrotriya says:

      If the application is admitted then you do not need to file separate and you can file only your claim and no need to file separate application.

      or if application is not yet admitted then only you can file separate application. You can not be a joint applicant and once if application admitted then no need to file separate application.
      Pl. note if that client has got money then you can file your fresh application.

      If you need help please contact to us on +91-8860552920.

  3. VINAY SONPAL says:

    You are right practically and legally. But if a corporate body is really in red finacially it may result into liquidation and then you lose chances of getting immediate money in full which is possible by pesuasion. Yes it should be used as last resort. Sales tax or income tax dues are also operational creditors (see Swiss Ribbons) and thus they can also file applications u/s 7.Thanks for wonderful article.

    1. Aadra Shrotriya says:

      Thanks for a valuable comment sir & in these cases we intimate that dont go for litigation. File the notice and petition and withdraw it because initially you may need to incur 1-2 lakhs for advertisement and I.P. cost.

      Sir these are second side or exceptional cases. I am saying that due to this reason we should not stop taking action against them.

      Thanks a ton for valuable revert and please suggest more things.

      Thanks
      CS Aadra
      aadra.shrotriya11@gmail.com

    1. Aadra Shrotriya says:

      Sir
      I tried to explain the basic understanding for a person who wants to take action company.

      after filling entire things will be in hand of COC and in your goodself.

      Thanks 🙂

    1. Aadra Shrotriya says:

      Thanks Ajay Ji..

      As per discussion we are meeting on 03.10.2018 at my office to proceed the case.

      for further any details please let me know.

  4. Zang says:

    Dear Learned Company Secretary Aadra Shrotriya

    Thanks a ton for this article and guidance on phone to me regarding this.

    It really very helpful for me and soon we will to you to handover case of my company under this act.

    Thanks once again my dear friend

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