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2019 (7) TMI 1426 - AT - Insolvency and BankruptcyAdmissibility of petition - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - Time Limitation - HELD THAT - Section 3(6) defines claim to mean a right to payment even if it is disputed. The Code gets triggered the moment default of 1 lakh or more (Section 4) occurs. It is clear that when the Respondent has disputed the amount as the amount is more than 1 lakh the application under Section 9 cannot be rejected. Time Limitation - HELD THAT - It is clear that the application is maintainable within three years from the date when the right to apply accrues. Since the Insolvency and Bankruptcy Code 2016 has come into effect since 1st December 2016 we hold that the application is not barred by limitation - The Adjudicating Authority while passing the order failed to appreciate the facts and erroneously held that there is a pre-existing dispute and the claim is barred by limitation. Case remitted back for denovo consideration - appeal allowed by way of remand.
Issues Involved:
1. Existence of a pre-existing dispute. 2. Limitation period for filing the application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. 3. Validity of the claim amount and the supporting documentation. Detailed Analysis: Existence of a Pre-existing Dispute: The Appellant, M/s Gupshup Technology India Pvt. Ltd., filed an application under Section 9 of the IBC against the Respondent, M/s Interpid Online Retail Pvt. Ltd., which was initially rejected by the Adjudicating Authority citing a pre-existing dispute. The Tribunal noted that the Respondent first defaulted on payments on 16th June 2015 and continued to default thereafter. Despite the Respondent acknowledging the debt on 15th April 2017, they later raised disputes regarding the invoices. The Tribunal found that the Respondent failed to present any evidence of disputes raised before the Demand Notice dated 24th October 2017, thus concluding that the alleged disputes were not bona fide and were raised only after the notice was issued. Limitation Period for Filing the Application: The Adjudicating Authority had held that the claim was barred by limitation. However, the Tribunal clarified that under Article 137 of the Limitation Act, 1963, the limitation period for filing an application under Section 9 of the IBC is three years from the date the right to apply accrues. Since the default occurred on 16th June 2015 and the IBC came into effect on 1st December 2016, the Tribunal held that the application filed in January 2018 was within the limitation period. Validity of the Claim Amount and Supporting Documentation: The Appellant had issued a Demand Notice under Section 8(1) on 24th October 2017, claiming an outstanding amount of ?82,41,053/-. The Respondent, in their reply, raised allegations of fraudulent invoicing and demanded supporting documentation. The Tribunal noted that the Respondent had not disputed the services provided by the Appellant and had availed of these services until they were terminated by the Appellant. The Tribunal referenced the Supreme Court’s decision in "Innoventive Industries Ltd. Vs. ICICI Bank and Ors." which clarified that a claim is valid even if disputed, as long as the default amount is ?1 lakh or more. Thus, the Tribunal concluded that the claim amount was valid and not barred by limitation. Conclusion: The Tribunal found that the Adjudicating Authority erred in its decision by not appreciating the facts correctly and wrongly concluding that there was a pre-existing dispute and that the claim was barred by limitation. The Tribunal set aside the impugned order dated 8th November 2018 and remitted the case back to the Adjudicating Authority for further consideration, taking into account the records submitted by the Appellant in light of the Supreme Court’s decision in "Innoventive Industries Ltd. Vs. ICICI Bank and Ors." The Tribunal allowed the appeal and provided an opportunity for the Respondent to settle the claim with the Appellant. No costs were awarded.
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