2019 (12) TMI 1399 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT - The date of default mentioned in the Petition is 01.04.2015 - This claim pertains to transactions in the year 2012-13. The date of default mentioned in the Petition is 01.04.2015. However, this is of no material significance because even if we assume the date of default to be 01.04.2015, the question of limitation has to be considered. It is not the case of the Operational Creditor that any acknowledgement of liability has been made by the Corporate Debtor or that any payment has been received within the period of limitation, in which case the applicability of section 18 or section 19 of the Limitation Act, 1963, may have a bearing. Since the petition itself is outside the period of limitation, we refrain from going into the merits of the matter at this stage - application rejected.

Summary

Issues involved:
Company Petition under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) seeking Corporate Insolvency Resolution Process (CIRP) against a listed public company. Validity of the claim, time-barred nature of the claim, existence of default, and jurisdiction of the Tribunal.

Analysis:

1. Jurisdiction and Validity of Claim:
The Company Petition was filed under section 9 of the IBC seeking to initiate CIRP against the Corporate Debtor for non-payment of a principal sum and interest. The Operational Creditor, engaged in import and trading of medical equipment, detailed the business relations and financial transactions with the Corporate Debtor, including payments made on behalf of the Corporate Debtor and advances for product orders. The Operational Creditor served a Demand Notice in accordance with section 8 of the IBC, to which the Corporate Debtor responded by disputing the claim's validity. The Corporate Debtor raised defenses regarding the period and validity of the claim, lack of documentation, and absence of default within the IBC's ambit.

2. Limitation and Default:
The Tribunal considered the limitation aspect, emphasizing the date of default mentioned in the Petition and the transactions' timeline. Citing legal precedents, including judgments from the Hon'ble Supreme Court, the Tribunal highlighted the applicability of the Limitation Act to IBC applications and the significance of the date of default in determining the limitation period. The Tribunal concluded that the present petition was filed beyond the limitation period based on the date of default and the principles established by the Supreme Court, thereby rejecting the application.

3. Operational Debt and Dismissal of Application:
Given the petition's limitation status, the Tribunal refrained from delving into the merits of the matter, specifically whether the transaction qualified as an "Operational Debt" under the IBC. The application was rejected on the grounds of being time-barred, and the Tribunal clarified that its decision did not prejudice the petitioner's rights to seek recourse in another judicial forum. The order was communicated to the parties as per the provisions of the IBC.

In conclusion, the Tribunal dismissed the Company Petition due to being time-barred, emphasizing the importance of the limitation period in insolvency proceedings and refraining from assessing the claim's merits. The judgment underscored the legal principles regarding limitation, default, and the jurisdiction of the Tribunal in such matters, ensuring a comprehensive analysis of the issues raised in the case.