NCLT Kochi Admits Section 9 Plea for Salary Dues; Holds Pre-Notification ₹1 Lakh Threshold Applicable

April 10, 2026 : The National Company Law Tribunal, Kochi Bench has admitted a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 against Seguro Foundations & Structures Pvt. Ltd. for non-payment of salary dues, holding that the earlier threshold of ₹1 lakh would apply since the petition was filed prior to the enhancement of the minimum default amount.

Delivering the order on 10 April 2026, Judicial Member Shri Vinay Goel clarified that the relevant date for determining the threshold is the date of filing of the petition and not the date of its registration. As the petition was filed on 12.03.2020, prior to the notification dated 24.03.2020 enhancing the threshold to ₹1 crore, the Tribunal held that the earlier threshold of ₹1 lakh would govern the case. The operational debt of ₹11,02,400 was therefore well above the applicable limit.

The petition was originally filed by Mr. Shaji Mathew, who had been appointed as Project Manager for modernization of schools in Malappuram district with a consolidated salary of ₹80,000 per month. He contended that despite performing his duties, the corporate debtor stopped paying his salary from December 2018 without issuing any termination. The unpaid salary for the period from December 2018 to December 2019 amounted to ₹10,40,000, and along with interest at 12% per annum, the total operational debt claimed was ₹11,02,400.

It was further submitted that repeated reminders, including letters and emails, failed to elicit any response from the corporate debtor. A demand notice dated 22.01.2020 was issued under Section 8 of the Code, but no reply raising a dispute was received within the statutory period and the dues remained unpaid, leading to the filing of the Section 9 application.

During the pendency of the proceedings, M/s INKEL Ltd. was impleaded as an additional respondent on the allegation that it held majority shares and assets of the corporate debtor. The impleadment order was challenged before the Appellate Tribunal and subsequently before the Supreme Court, where interim protection was granted. However, the Supreme Court permitted continuation of the main Section 9 proceedings against the original corporate debtor.

The Tribunal also took note that the original operational creditor passed away during the pendency of the matter and was substituted by his legal heirs. It held that the claim for unpaid salary is a transmissible right and can be pursued by legal representatives, with no legal impediment to continuation of proceedings.

On merits, the Tribunal found that the corporate debtor failed to appear despite valid service of notice and was proceeded ex parte. It held that the relationship between the parties was that of employer and employee, the salary dues constituted operational debt, and no pre-existing dispute had been raised. The material on record established the existence of debt and default, and all requirements under Section 9 stood satisfied.

Accordingly, the Tribunal admitted the petition and initiated Corporate Insolvency Resolution Process against the corporate debtor. A moratorium under Section 14 of the Code was declared, and Mr. Sankar P. Panicker was appointed as Interim Resolution Professional to take over the management of the corporate debtor. Directions were also issued for public announcement of CIRP and deposit of initial expenses by the operational creditor.

Cause Title: Shaji Mathew (Through Legal Representatives) v. Seguro Foundations & Structures Pvt. Ltd.
Case No.: IBA/30/KOB/2020
Coram: Shri Vinay Goel (Judicial Member)