2022 (2) TMI 743 - AT - Insolvency and Bankruptcy

Rejection of application on the ground of time limitation - no application has been filed for condonation of delay - HELD THAT - Payment due date of the last invoice is 10.04.2014 and admittedly no payment has been made after 10.04.2014. The right to sue accrued to the Appellant from the last payment made i.e. 31.03.2014. At best the limitation will be three years thereafter. The submission of the learned counsel for the Appellant that since response to the legal notice, which was issued by he Appellant, they have asked for 10% bank guarantee it shall auto extend the limitation does not commend us. The mere fact that the Corporate Debtor has asked to submit 10% Bank Guarantee shall not in any manner arrest running of limitation which began when amount became due and payable and not paid - In the present case, according to own documents filed by the Appellant, that amount became due on 10.04.2014, which is mentioned in the Column 1 Form IV of the Application which was filed by the Appellant itself. There are no materials on the record, as has been rightly observed by the Adjudicating Authority, for granting any extension of limitation. The submission of the learned counsel for the Appellant is that there being no application for condonation of delay under Section 5, the court has powers to condone delay in appropriate case there being sufficient cause. The Appellant has not brought on record any material or made a case to show sufficient cause for condonation of delay within Section 5. There are no relevant material to exercise our jurisdiction under Section 5 of the Limitation Act for condoning the delay - Application under Section 9 filed by the Appellant was rightly rejected by the Adjudicating Authority as barred by time - appeal dismissed.

Summary

Issues:
1. Appellant filed appeal against dismissal of application under Section 9 of the Code by Adjudicating Authority.
2. Appellant claimed unpaid amount for five invoices, with the last payment due on 10.04.2014.
3. Adjudicating Authority rejected application as time-barred, citing limitation expired on 30.03.2017.
4. Appellant argued for condonation of delay based on legal notice and bank guarantee request.
5. Tribunal analyzed submissions and upheld Adjudicating Authority's decision, dismissing the appeal.

Analysis:
The Appellant filed an appeal challenging the dismissal of their application under Section 9 of the Code by the Adjudicating Authority. The Appellant claimed to be an Operational Creditor with unpaid amounts for five invoices, the last payment due on 10.04.2014. The Adjudicating Authority rejected the application as time-barred, stating that the limitation expired on 30.03.2017, with no grounds for extension provided. The Appellant argued for condonation of delay, citing a legal notice sent on 25.04.2014, requesting payment within seven days, and a subsequent reply from the Corporate Debtor asking for a bank guarantee. However, the Tribunal found no valid reason for extending the limitation period.

The Tribunal reviewed the documents submitted by the Appellant, confirming that the last payment was due on 10.04.2014. Despite the bank guarantee request in the Corporate Debtor's reply to the legal notice, the Tribunal emphasized that such a request does not affect the running of the limitation period. The Appellant failed to demonstrate sufficient cause for condonation of delay under Section 5 of the Limitation Act. The Tribunal concluded that the Adjudicating Authority rightly rejected the application as time-barred, as no grounds for extension were presented. Therefore, the Tribunal dismissed the appeal, affirming the decision of the Adjudicating Authority.