2019 (11) TMI 1572 - Tri - IBC

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - existence of debt and dispute or not - time limitation - HELD THAT - This claim pertains to transactions that is stated to have taken place between September 15 2014 and September 22 2014. The date of default is September 15 2014. It is not clear as to how when the supplies have taken place up to September 22 2014 the date of default can be September 15 2014. However this is of no material significance because even if we assume the date of default to be September 23 2014 i. e. the day after the last default was raised on September 22 2014 the question of limitation has to be considered - It is not the case of the operational creditor that any payment has been received after September 22 2014 in which case the applicability of section 18 of the Limitation Act 1963 may have a bearing. That being the case since the date of default even according to the operational creditor is September 22 2014 and applying the principles laid down by the hon ble Supreme Court in B. K. Educational Services P. Ltd. v. Parag Gupta and Associates 2018 (10) TMI 777 - SUPREME COURT and Sagar Sharma v. Phoenix ARC P. Ltd. 2019 (10) TMI 224 - SUPREME COURT judgments the limitation for filing the proceedings ended on September 21 2017 while the present petition has been filed on May 15 2018. There is also no proof of any acknowledgment of liability on the part of the corporate debtor within the limitation period that may have the effect of extending the period of limitation within the meaning of section 18 of the Limitation Act 1963 - Furthermore even on the merits there is no evidence placed on record that the invoices were received by the corporate debtor. Neither have delivery challans evidencing service on goods on the corporate debtor been placed on record. Application dismissed.

Summary

Issues:
Company petition under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) for corporate insolvency resolution process (CIRP) against a private company for non-payment of dues.

Analysis:
The petition was filed by an operational creditor seeking to initiate CIRP against the corporate debtor for failing to pay a significant amount as principal and interest. The operational creditor provided details of the invoices and the total debt due, along with serving a demand notice as per section 8 of the IBC. The corporate debtor, in response, raised defenses including issues with the transactions, bounced cheques, and pending legal matters. Both sides presented their arguments before the Tribunal.

The Tribunal examined the timeline of transactions and the date of default, considering the principles of limitation under the Limitation Act, 1963. Citing Supreme Court judgments, the Tribunal emphasized that the right to sue accrues when a default occurs, and applications under the IBC are subject to article 137 of the Limitation Act. As per the established legal principles, the Tribunal determined that the petition was time-barred as it was filed after the limitation period had expired based on the date of default provided by the operational creditor.

Additionally, the Tribunal highlighted the lack of acknowledgment of liability by the corporate debtor within the limitation period and the absence of evidence proving receipt of invoices or delivery of goods. Based on these factors and the legal precedents cited, the Tribunal rejected the application, emphasizing that the decision should not be construed as a judgment on the merits. The parties were informed of the order, maintaining the petitioner's right to seek recourse in other judicial forums despite the dismissal of the present petition.