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2021 (12) TMI 741 - AT - Insolvency and BankruptcyInitiation of CIRP - NCLT rejected the application of appellant u/s 9 - Period of limitation - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Service of demand notice - HELD THAT - The Ld. Adjudicating Authority has taken note of the fact that the Demand Notice issued under Section 8 of the IBC on 15.03.2019 which was sent through Registered post on 19.03.2019. However, the same was returned with a postal remark addressee moved . The Appellant has also issued Demand Notice through email on the same date demanding the arrears of the Annual Listing Fee. However, no dispute is raised by the Respondent. The Ld. Adjudicating Authority have giving finding that debt failed due on 01.04.2015 as admitted by the Petitioner, hence the Application filed under Section 9 of the IBC barred by limitation. The Ld. Adjudicating Authority has rightly come to the conclusion that the agreement so filed cannot be relied upon, as the same is not a valid agreement in the eye of law, so Learned Counsel for the Appellant relied on an order passed by this Appellate Tribunal in B.S.E. Ltd. Vs. Neo Corp International Ltd. dated 05.04.2019 (supra) is not applicable in this matter - Moreover, Listing Fees comes under the ambit of Regulatory dues which SEBI is entitled to recover. The Respondent being an entitly registered under SEBI, is under an obligation to follow the Regulations prescribed by SEBI for recovery of its dues. The dues so said are not Operational Dues but Regulatory Dues . The Insolvency Law Committee suggests that Regulatory Dues are not to be recovered under Operational Debt . The appeal is dismissed.
Issues Involved:
1. Limitation period for filing an application under Section 9 of the Insolvency and Bankruptcy Code (IBC). 2. Validity of the Listing Agreement between the parties. 3. Classification of Annual Listing Fees (ALF) as operational debt or regulatory dues. Detailed Analysis: 1. Limitation Period for Filing an Application under Section 9 of the IBC: The appellant contended that the right to apply under Section 9 should not be barred by limitation, arguing that the default was continuous, not a one-off occurrence. The appellant highlighted that the default in paying ALF was ongoing, with separate invoices raised post-2015, and thus, the application should not be barred under Article 137 of the Limitation Act. The appellant referenced the case 'B.S.E. Ltd. Vs. Neo Corp International Ltd.' where the right to apply accrued on 1st April 2017, and the application was not barred by limitation. However, the Adjudicating Authority found that the debt fell due on 01.04.2015, making the application filed under Section 9 barred by limitation. 2. Validity of the Listing Agreement: The appellant argued that the Listing Agreement executed between the parties was valid and binding, despite the respondent's name change from Adeshwar Cotton Industries Ltd. to ACIL Cotton Industries Ltd. The Adjudicating Authority, however, noted discrepancies in the agreement, including blank pages and lack of signatures, and concluded that the agreement could not be relied upon as a valid agreement. The Tribunal affirmed this view, stating that the agreement was not valid in the eye of law. 3. Classification of Annual Listing Fees (ALF) as Operational Debt or Regulatory Dues: The Adjudicating Authority observed that the ALF falls under the ambit of 'Regulatory Dues,' which SEBI is entitled to recover. The Tribunal noted that the respondent, being an entity registered under SEBI, is obligated to follow SEBI regulations for recovery of dues. It was concluded that the dues are not 'Operational Dues' but 'Regulatory Dues,' and as per the Insolvency Law Committee, regulatory dues are not to be recovered under 'Operational Debt.' Conclusion: The Tribunal affirmed the impugned order dated 31.12.2020 passed by the Adjudicating Authority (NCLT, Ahmedabad Bench), dismissing the appeal. The Tribunal concluded that the application under Section 9 of the IBC was barred by limitation, the Listing Agreement was not valid, and the ALF constituted regulatory dues, not operational debt. The appeal was dismissed with no order as to costs.
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