2021 (4) TMI 620 - Tri - IBC

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues or not - Operational Creditor - existence of debt and dispute or not - Time Limitation - HELD THAT - In the case of Babulal Vardharji Gurjar Vs Veer Gurjar Aluminium Industries Pv. Ltd. Anr. 2020 (8) TMI 345 - SUPREME COURT it was held that an application under the Insolvency and Bankruptcy Code seeking CIRP in respect of the Corporate Debtor having been filed after a period three years from the date of default is barred by limitation. The petition dismissed as being barred by limitation.

Summary

Issues:
Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016; Debt recovery against invoices issued between 02.11.2010 to 10.12.2012; Dispute regarding payment due and limitation period; Application for CIRP filed after the limitation period.

Analysis:

1. Initiation of CIRP under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The Operational Creditor, A. K. C. Infrastructure Pvt. Ltd., filed a petition seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Amrit Cement Ltd., under Section 9 of the Insolvency and Bankruptcy Code, 2016. The petition was based on the debt owed by the Corporate Debtor to the Operational Creditor for fabrication and erection work completed satisfactorily. The total billing amount due was specified along with the details of invoices raised.

2. Debt recovery against invoices issued between 02.11.2010 to 10.12.2012:
The Operational Creditor claimed that the Corporate Debtor owed a total of &8377; 1,95,28,552/- recoverable against 81 invoices issued between 02.11.2010 to 10.12.2012. The Operational Creditor provided details of the work orders, invoices, and the amount due, supported by a summary sheet and a certificate from the Auditor. However, the Corporate Debtor disputed the payment due, citing the limitation period as a defense.

3. Dispute regarding payment due and limitation period:
The Corporate Debtor contended that the debt claimed by the Operational Creditor was time-barred as per the Limitation Act. The Corporate Debtor argued that the invoices raised between 02.11.2010 to 10.12.2012 were beyond the limitation period, and hence, the Operational Creditor was not entitled to claim the amount. The Corporate Debtor denied the outstanding payment and requested withdrawal of the notices issued by the Operational Creditor.

4. Application for CIRP filed after the limitation period:
The Adjudicating Authority, considering the arguments presented by both parties and referring to relevant judgments, including B.K. Educational Services and Babulal Vardharji Gurjar case, concluded that the application filed by the Operational Creditor for CIRP was barred by limitation. The Authority rejected the petition on the grounds of being filed after the limitation period, as per the provisions of the Insolvency and Bankruptcy Code and the Limitation Act.

In conclusion, the Tribunal rejected the petition for initiation of CIRP against the Corporate Debtor, emphasizing that the application was time-barred. The judgment highlighted the significance of the limitation period in insolvency proceedings and clarified that the decision was limited to the issue of limitation and does not impact any other legal proceedings.