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2020 (2) TMI 380 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - corporate debtor failed to make repayment of its debt - time limitation for filing proceeding - HELD THAT - There is no proof of any acknowledgement of liability on the part of the Corporate Debtor or any payment made by the Corporate Debtor within the limitation period that may have the effect of extending the period of limitation within the meaning of section 18 or section 19, as the case may be, of the Limitation Act, 1963. The dates of default in respect of the five invoices range between 02.03.2014 and 11.07.2014. Even if we take the last of the dates, i.e., 11.07.2014, the three-year limitation in terms of Article 137 of the Limitation Act, 1963, for filing the present proceeding ended on 10.07.2017, while the present petition was filed on 15.05.2018. Reliance can be placed in the case of B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES 2018 (10) TMI 777 - SUPREME COURT where it was held that If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, section 5 of the Limitation Act may be applied to condone the delay in filing such application. Thus, not only is the Petition devoid of merits but, it is also barred by limitation - petition dismissed.
Issues Involved:
1. Date of Default 2. Proof of Service of Invoices 3. Proof of Service of Demand Notice 4. Cheques as Security 5. Limitation Period Issue-wise Detailed Analysis: 1. Date of Default: The Operational Creditor claimed the date of default as 24.02.2014. However, the Tribunal found this date incorrect since the invoices provided for a five-day payment period. The correct dates of default ranged between 02.03.2014 and 11.07.2014, as per the detailed table provided in the judgment. The Tribunal concluded that the date of default cannot be taken as 24.02.2014. 2. Proof of Service of Invoices: The Tribunal noted that there was no proof of service of invoices on the Corporate Debtor. This was evidenced by the absence of signatures on the invoices, and no Delivery Challans or Lorry Receipts were annexed to the Petition. 3. Proof of Service of Demand Notice: The Tribunal found no proof of service of the Demand Notice on the Corporate Debtor. There were no postal receipts, acknowledgment cards, tracking reports from India Post, or evidence of hand delivery. 4. Cheques as Security: The Operational Creditor attached copies of email correspondence dated 08.10.2014, indicating that the Corporate Debtor requested not to deposit cheques as they were arranging payment. However, the Tribunal stated that this correspondence did not help the Operational Creditor's case. The Tribunal emphasized that the burden of proof was on the Operational Creditor to show that the cheques were related to the transactions in question, which was not satisfactorily discharged. 5. Limitation Period: The Tribunal considered whether the debt was time-barred. It found no proof of any acknowledgment of liability or payment made by the Corporate Debtor within the limitation period that could extend the period of limitation under sections 18 or 19 of the Limitation Act, 1963. The Tribunal cited the Supreme Court judgment in B.K. Educational Services (P.) Ltd. v. Parag Gupta & Associates, which clarified that the right to sue accrues when a default occurs, and if the default occurred over three years prior to the date of filing the application, it would be barred under Article 137 of the Limitation Act. Since the dates of default ranged between 02.03.2014 and 11.07.2014, the three-year limitation ended on 10.07.2017. The present petition, filed on 15.05.2018, was therefore barred by limitation. The Tribunal also addressed the Operational Creditor's argument that the time taken in pursuing other proceedings should be excluded under section 14 of the Limitation Act, 1963. The Tribunal found that this argument was not applicable since the remedies under the Negotiable Instruments Act 1881 and the IBC are not mutually exclusive. Conclusion: The Tribunal concluded that the Petition was devoid of merits and barred by limitation. Therefore, the Petition was dismissed. The Tribunal clarified that the dismissal should not prejudice the Operational Creditor's rights before any other judicial forum or under any other law. Order: The Petition was dismissed, and a copy of the order was to be communicated to the parties as per section 9(5)(ii) of the IBC.
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