2021 (3) TMI 222 - AT - IBC

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt - genuintiy of cheque relied upon to establish acknowledgement of debt - time limitation - HELD THAT - Admittedly, from the perusal of the Part IV particulars of financial debt on which default occurred on 01.04.2014 has agreed between the parties - Hon ble Supreme Court of India in Babulal Vardharji Gurjar V/s Veer Gurjar Aluminium Industries Pvt. Ltd. and Anr. 2020 (8) TMI 345 - SUPREME COURT has held that even if Section 18 of the Limitation Act and principles thereof were applicable, the same would not apply to the application under consideration in the present case, looking to the very averment regarding default therein and for want of any other averment in regard to acknowledgement - the issue decided in favor of Appellant and against the Respondent No. 1. Genuintiy of cheque relied upon to establish acknowledgement of debt - HELD THAT - The Appellant has filed I.A. before the NCLT, Kolkata Bench on 27th August, 2018 with a prayer to direct the Financial Creditor to produce the original cheque so that it may be sent to the Questioned Document Investigation Department, CID, West Bengal for verification, but no order was passed by the Adjudicating Authority and no reliance could be placed on the aforesaid document. As the Appellant disputed the cheque in question as it is disputed document, did not decide this issue and no order - decided in favour of the Appellant and against the Respondent No. 1. Thus, the Ld. Adjudicating Authority have failed to consider the facts that Application under Section 7 of the IBC is barred by limitation and secondly, that so called cheque on which the Respondent No. 1 disputed, no reliance could be placed on the aforesaid document. The impugned order cannot be sustained in the eye of Law - application dismissed.

Summary

Issues Involved:
1. Whether the Application under Section 7 of the IBC filed by the Respondent No. 1 is barred by limitation?
2. Whether the cheque relied upon to establish acknowledgment of debt was genuine?

Issue 1 - Barred by Limitation:
The appeal was filed by the Appellant against the order admitting an application under Section 7 of the IBC by the Financial Creditor. The Appellant contended that the application was hit by limitation as the date of default mentioned was beyond the limitation period. The Respondent argued that the application was within the limitation period as the default occurred when the cheque was dishonored. The Tribunal analyzed the facts and cited a Supreme Court judgment, determining that the application was indeed barred by limitation. The Court found in favor of the Appellant on this issue.

Issue 2 - Genuine Cheque:
The Appellant disputed the genuineness of the cheque relied upon by the Respondent to establish acknowledgment of debt. The Appellant requested the Adjudicating Authority to direct the production of the original cheque for verification, but no decision was made on this matter. As the authenticity of the cheque remained in dispute, the Tribunal ruled in favor of the Appellant on this issue as well.

Conclusion:
After careful consideration and review of the arguments and evidence presented, the Tribunal found that the Adjudicating Authority had erred in not addressing the issues of limitation and the disputed cheque. Consequently, the impugned order was set aside, and the Application under Section 7 of the IBC filed by the Financial Creditor was dismissed. The Corporate Debtor was released from the Corporate Insolvency Resolution Process, and all actions taken by the Interim Resolution Professional were declared illegal. The matter was remitted to the Adjudicating Authority to determine the fees and costs of the CIRP, to be borne by the Financial Creditor. The Appeal was allowed with the mentioned observations and directions, with no costs incurred. The Registry was instructed to communicate the Judgment to the Adjudicating Authority.