2019 (11) TMI 1524 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor committed default in making payment of unpaid operational debt - Existence of debt and dispute or not - time limitation - HELD THAT - This application is also found not maintainable being barred by limitation. According to the applicant, the first instance of default on the part of the Corporate Debtor pertains to the invoice dated 13.07.2015. The last invoice seen was issued on 28.10.2015. According to the Operational Creditor, it is maintaining a running account and part payment was made by the Corporate Debtor on 04.01.2016 to the tune of ₹ 12,63,816.12/- and therefore, its claim is not barred by limitation. The applicant having failed in proving that it is the assignee of the debt due to the Siemens Ltd.., and that the claim being found barred by limitation, this application filed under Section 9 by the Operational Creditor is liable to be dismissed with no order as to costs - Petition dismissed.

Summary

Issues:
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process due to default in payment of operational debt.

Detailed Analysis:
1. Transfer of Healthcare Business: Siemens Ltd. transferred its healthcare business to Siemens Healthcare Private Limited, the Operational Creditor, via a resolution dated 06.05.2016. The Distribution Agreement between Siemens Ltd. and the Corporate Debtor outlined the terms for sale of goods in specific regions.

2. Default in Payment: The Corporate Debtor failed to pay operational debt amounting to ?2,25,69,910.94 as per the Distribution Agreement terms. Despite receiving goods from the Operational Creditor, the Corporate Debtor did not make payments from 2015 to 2018, leading to a demand notice being issued.

3. Operational Creditor's Claim: The Operational Creditor supported its claim with documents like Board Resolution, Distribution Agreement, demand notice, and invoices. The Operational Creditor maintained that the debt was legally transferred to it and thus fell under the definition of an operational creditor.

4. Competency of Applicant: The Tribunal raised concerns regarding the competency of the Operational Creditor to file the application under Section 9. It noted the lack of concrete evidence proving the transfer of debt from Siemens Ltd. to Siemens Healthcare Private Limited, casting doubt on the Operational Creditor's status.

5. Limitation Bar: The application was deemed not maintainable due to being time-barred. The Tribunal cited the Limitation Act, 1963, and the three-year limitation period from the date of default. As the application was filed in 2019 for defaults dating back to 2015, it was considered barred by limitation.

6. Dismissal of Application: Due to the failure to prove the transfer of debt and the application being time-barred, the Tribunal dismissed the application under Section 9. No costs were awarded, and the order was communicated to both parties for compliance.

This detailed analysis of the judgment highlights the key legal aspects, evidence presented, and the Tribunal's reasoning behind dismissing the application.