2019 (6) TMI 965 - Tri - IBC

Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - outstanding debt - section 9 of Insolvency Bankruptcy Code, 2016 - winding up petition petition - time limitation - HELD THAT - It is pertinent to note that the date of default, admittedly, is 31.07.2009 and the period of limitation would be three years in the present case. Therefore, the limitation period for filing of Petition would expire on 30.7.2012. The Petition before the Hon ble High Court was filed on or after 24.06.2013 which is after almost 11 months from the date of legal notice dated 26.07.2012. It is pertinent to mention that Hon ble High Court of Delhi in Interactive Media and Communication Solution Private Limited vs GO Airlines Limited, 2013 (2) TMI 195 - DELHI HIGH COURT has held that a claim which is barred by limitation on the date of filing of the Petition cannot be said to be within limitation if the notice under section 434 of Companies Act demanding payment of the said claim was sent within limitation. In the present case, the notice under section 434 was filed on 26.07.2012 which is within limitation period; however, the petition for winding up was filed on 24.06.2013 which is beyond the period of limitation. Thus, it appears that the winding up petition has been filed beyond the period of limitation of three years. The petition is rejected as the debt being barred by law of limitation.

Summary

Issues:
Company petition under section 9 of Insolvency & Bankruptcy Code, 2016 (I&B Code) for non-payment of outstanding debt. Preliminary objection of the claim being barred by the law of limitation.

Analysis:
The petitioner, an Operational Creditor, filed a Company Petition under section 9 of the I&B Code against the Corporate Debtor for non-payment of an outstanding debt amounting to ?30,34,508/-. The petition was based on the ground that the Corporate Debtor did not pay a balance amount of ?8,27,106/- out of the total invoice amount. The petitioner submitted various documents including board resolution, bank statement, and legal notices to support the claim. The Corporate Debtor, in response, denied any amount due, stating that the claim was time-barred as it related to supplies made in 2008.

The Corporate Debtor raised a preliminary objection that the petition was barred by limitation, as the petition was filed almost ten years after the invoice date. The Tribunal acknowledged that the date of default was in 2009, and the limitation period for filing the petition would have expired in 2012. Referring to a relevant judgment, the Tribunal noted that a claim barred by limitation at the time of filing the petition cannot be considered within limitation even if the notice demanding payment was sent within the limitation period.

The petitioner argued that the Corporate Debtor's balance sheets showed sundry creditors, indicating liability for the outstanding amount. However, upon examination, the Tribunal found that these entries did not constitute an acknowledgment of liability in writing signed by the parties, as required under the Limitation Act. Consequently, the Tribunal concluded that the petition was time-barred and rejected it on that basis.

In the final order, the Tribunal rejected the petition under section 9 of the I&B Code against the Corporate Debtor, stating that the debt was barred by the law of limitation. The Tribunal clarified that its decision did not express an opinion on the merit of the claim, allowing the petitioner to pursue the claim through the appropriate legal channels. The Registry was directed to communicate the order to the Operational Creditor promptly, and a compliance report was requested from the Designated Registrar.