2021 (12) TMI 1317 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time Limitation - HELD THAT - On page 11 part 4, the applicant referred to the email dated 27.04.2017, on the basis of which, the applicant claimed the amount which is in default, and it is found that the date of default mentioned in the application is 30.12.2016 whereas the present application is filed on 13.03.2020. In view of Article 137, the applicant is required to file the application within 3 years when the right to apply accrues - the date of default referred at page 11 and accordingly, the date of default, is 30.12.2016. On the basis of that, it can be said that applicant admits that the date of default is 30.12.2016 and since as per the termination letter dated 30.11.2016, the last working date of the applicant was 30.12.2016, therefore, the date of default is 30.12.2016. In this case the date from which debt fell due was 30.12.2016, therefore, the right to apply accrues on 30.12.2016 and the present application was filed on 13.03.2020 which is beyond 3 years of date of default. Hence, the application is barred by limitation. The e-mail dated 27.04.2017 at page 52 sent by Mahesh Venkateswaran to Mr. Mohan i.e. Applicant shows that that the HR of the Corporate Debtor will process an additional F F payment which covers the Unpaid notice period amount and the internal rating of the Applicant as per records does not provide for any variable payment or increment and e-mail dated 15.02.2017 at page 32 sent by Corporate Debtor to the Applicant shows that the applicant was informed that apart from ₹ 18,584/- nothing more is payable to the Applicant and outstanding would be processed within 15 days subject to the acknowledgement of the same by the Applicant. Further, the waiver of the notice period of 2 months was also communicated to the Applicant by the Respondent by way of relieving letter dated 06.01.2017. The present application is barred by limitation - Appeal dismissed.

Summary

Issues Involved:

1. Maintainability of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of pre-existing disputes between the parties.
3. Limitation period for filing the application.
4. Acknowledgment of debt by the Corporate Debtor.

Issue-wise Detailed Analysis:

1. Maintainability of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016:

The petitioner, an Operational Creditor, filed the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Operational Creditor claimed dues related to unpaid notice period, variable pay, arrears of increment, and pending reimbursements. The Corporate Debtor, however, argued that the petition was not maintainable due to pre-existing disputes and that the termination of the Operational Creditor’s employment was due to below-average performance.

2. Existence of pre-existing disputes between the parties:

The Corporate Debtor contended that there were pre-existing disputes regarding the claims made by the Operational Creditor. The disputes were communicated to the Operational Creditor through various correspondences, including termination and resignation letters. The Corporate Debtor emphasized that the Operational Creditor was aware of these disputes prior to initiating the proceedings under the Insolvency Code. Additionally, the Corporate Debtor highlighted that the Operational Creditor had filed claims before the Labour Commissioner Court and initiated a civil commercial suit before the Hon'ble Patiala House District Court, which did not yield positive results for the Operational Creditor.

3. Limitation period for filing the application:

The Tribunal examined the limitation period for filing the application under Article 137 of the Limitation Act, which prescribes a three-year period from the date when the right to apply accrues. The Operational Creditor argued that the limitation period should be considered from 21.12.2017, the date when the first communication of denial was made by the Corporate Debtor. However, the Tribunal found that the date of default was 30.12.2016, as per the termination letter dated 30.11.2016, making the last working day of the Operational Creditor 30.12.2016. Since the present application was filed on 13.03.2020, it was beyond the three-year limitation period and hence barred by limitation.

4. Acknowledgment of debt by the Corporate Debtor:

The Operational Creditor relied on an email dated 27.04.2017 from Mr. Mahesh Venkateshwaram, which allegedly confirmed the unpaid notice period amount. However, the Corporate Debtor argued that the email was issued without requisite approval and did not constitute an acknowledgment of debt. The Tribunal reviewed various emails and found that the Corporate Debtor had consistently denied the claims of the Operational Creditor. The Tribunal concluded that the emails did not establish a confirmed debt and that the Corporate Debtor had not acknowledged the debt as per Section 18 of the Limitation Act.

Conclusion:

The Tribunal dismissed the application as it was barred by limitation, emphasizing that the right to apply accrued on 30.12.2016, and the application filed on 13.03.2020 was beyond the prescribed three-year period. The Tribunal also noted that the emails and correspondences between the parties did not constitute an acknowledgment of debt by the Corporate Debtor, and there were pre-existing disputes regarding the claims made by the Operational Creditor.