2020 (12) TMI 324 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - alleged default on the part of the Respondent in settling an amount including interest are lying towards the goods supplied by the Applicant - Ex-parte order - HELD THAT - The applicant has supplied basic and high temperature refectories items to the Respondent M/s. Rathi Ispat Ltd. and various outstanding invoices were raised against the Respondent. Further, the claims of the applicant are barred by the Limitation Act, 1937, because last invoice was raised by the applicant on 22.03.2007 against which the Limitation has expired way back. The remedy pursued by the applicant by way of recovery suit which was decided on 26.09.2016 does not entitle the applicant to exclude such period out of limitation for the purpose of ascertaining limitation under the provisions of the code. The operational creditor is not entitled to get the computation of limitation under section 14(2) of the Limitation Act therefore the same is barred by limitation - Application dismissed.

Issues:
1. Application for corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code 2016.
2. Setting aside ex-parte order and filing of reply by the Respondent.
3. Contentions raised by the Respondent in the reply.
4. Rejoinder filed by the Applicant.
5. Barred claim by the Limitation Act 1937.
6. Interpretation of the judgment in light of relevant legal precedents.

Issue 1: Application for Corporate Insolvency Resolution Process:
The Applicant, M/s. Paragon Ceramics, filed an application under Section 9 of the Insolvency and Bankruptcy Code 2016 against Rathi Ispat Ltd. for an alleged default in settling an outstanding amount. The Applicant detailed the transactions, outstanding dues, legal notices sent, and a subsequent civil suit for recovery, which resulted in a decree in favor of the Applicant.

Issue 2: Setting Aside Ex-parte Order and Filing of Reply:
The Respondent filed an application to set aside the ex-parte order, claiming service at the old address and providing evidence of a new registered address. The Tribunal granted the request, allowing the Respondent to file a reply.

Issue 3: Contentions Raised by the Respondent:
The Respondent contended that the application was not maintainable as the Applicant was not a legal entity, the claim was based on a decree not enforceable, and no valid demand notice was served. The Respondent also argued that the claim should be made to the bank due to asset possession and highlighted other pending cases against the company.

Issue 4: Rejoinder Filed by the Applicant:
The Applicant responded to the Respondent's contentions, emphasizing discrepancies in the registered address, the maintainability of the petition despite asset possession, and the relevance of the previous objection by Punjab National Bank.

Issue 5: Barred Claim by the Limitation Act 1937:
The Tribunal observed that the claims were barred by the Limitation Act, as the last invoice was raised in 2007, and the remedy pursued through a recovery suit did not exclude the period from limitation calculation.

Issue 6: Interpretation of the Judgment in Light of Legal Precedents:
The Tribunal referred to legal precedents and highlighted that a decree passed by a court for recovery does not defer the default date for limitation calculation under the Insolvency and Bankruptcy Code. The Tribunal concluded that the application was barred by limitation, dismissing it without considering other arguments raised.

In conclusion, the Tribunal dismissed the application on the grounds of being time-barred by the Limitation Act, emphasizing that a court decree for recovery does not impact the default date for limitation calculation under the Insolvency and Bankruptcy Code.

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