Recover your Earned Money with the help of IBC 2016

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 [email protected])