Insolvency Petition Filed Against Fiitjee; NCLT Seeks Response

Insolvency Petition Filed Against Fiitjee; NCLT Seeks Response

Introduction

The National Company Law Tribunal (NCLT), New Delhi, issues notice to FIITJEE Limited on a corporate insolvency plea filed by its former employee Vinod Kumar Agarwal, who claims unpaid dues of over Rs.2.6 crore.

Factual Background

FIITJEE, a pioneer in India's competitive exam coaching space, has been grappling with financial and operational challenges in recent years. The company has faced a decline in market share, largely due to the post-covid business model disruption and increased competition from online players.

Procedural Background

The operational creditor, Vinod Kumar Agarwal who held a senior position at FIITJEE, has approached the tribunal under Section 9 of the Insolvency and Bankruptcy Code, 2016. According to him, despite repeated requests, the corporation neglected to pay his dues for fiscal years 2023-24 and 2024-25. However, FIITJEE stated that he was a Key Managerial Personnel (KMP), but he refuted this in the NCLT. The tribunal is now anticipated to investigate whether there was a prior conflict between FIITJEE and the operational creditor in order to determine the plea's maintainability.

Issues Involved

1. Insolvency Plea: Whether FIITJEE's failure to clear Agarwal's dues constitutes a valid ground for insolvency proceedings.

2. Pre-existing Dispute: Whether there was a pre-existing dispute between FIITJEE and Agarwal, which could affect the maintainability of the plea.

Contentions of the Parties

Agarwal's Contentions: The operational creditor claims that FIITJEE failed to clear his dues from FY 2023-24 and 2024-25 despite repeated demands. He denies being a Key Managerial Personnel (KMP) as claimed by FIITJEE.

FIITJEE's Contentions: FIITJEE claimed Agarwal was a KMP, but this claim was disputed by Agarwal.

Reasoning and Analysis

The NCLT will analyze whether there was a pre-existing dispute between FIITJEE and the operational creditor to determine the maintainability of the plea. The tribunal has directed FIITJEE to file its response.

Final Decision

A NCLT Bench comprising Mahendra Khandelwal (Judicial Member) and Subrata Kumar Dash (Technical Member) heard the case and asked FIITJEE to file a response. The matter has been set for a hearing on July 10, 2025.

Law Settled

This case highlights the importance of settling dues to avoid insolvency proceedings. The NCLT's decision will provide clarity on the validity of Agarwal's claims.

In this case the operational creditor was represented by Mr. Praphull Chandan Jha, Advocate.