2022 (7) TMI 366 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - claims of the Respondent is clearly time barred and the petition under IBC is not maintainable being time barred and on the ground of pre-existence of dispute namely pending civil suits on the alleged claims - HELD THAT - It is an admitted fact that the petition has been transferred by the Hon ble High Court itself on 07.06.2018 after which the Respondent filed Section 9 Application before the Adjudicating Authority in the month of May, 2019. The Appellant enclosed the copy of the Application as filed under Section 9 before the Adjudicating Authority as annexure to the Appeal at page 44 to 58. From the perusal of the application, it is unequivocal that the Respondent filed fresh Application before the Adjudicating Authority as per the amended notification. Hence, the stand of the Appellant that the application is not in accordance with the notification dated 07.12.2016 does not hold any merit. Even prior to filing of application by the Respondent in the month of May, 2019, the Respondent issued a demand notice in Form-3 dated 13.03.2019 demanding a sum of Rs.1,77,15,636/-. In the demand notice at serial no. 6 the Respondent clearly mentioned the MoU dated 13.02.2016. The Appellant / Corporate Debtor issued a reply dated 22.03.2019 through their advocate stating that the signatures on the MoU and cheques obtained forcefully by threatening the Appellant. From the perusal of the application filed by the Respondent at Column 2 of Part-IV, the amount claimed as Rs.1,77,15,636/- due from 04.04.2016 to 04.03.2019. At Part-V, Column 8 the Respondent mentioned the invoices raised by the Respondent/operational creditor and relied upon MoU and dishonoured of cheques and filing of C.P. No. 186 of 2016 before Hon ble High Court. Even otherwise, for the purpose of limitation it is seen from the demand notice and from the Application filed under Section 9 by the Respondent before the Adjudicating Authority, the default shown as 04.04.2016 and the Application filed before the Adjudicating Authority in the month of May, 2019 is within the period of limitation as prescribed under law. Therefore, the application is not barred by limitation. From the sequence of events, it is evident that the debt and default has been proved and the Adjudicating Authority rightly admitted the Application in accordance with law. This Tribunal does not find any illegality or infirmity in the order passed by the Adjudicating Authority. This Tribunal comes to a resultant conclusion that the appeal is devoid of merit on all aspects and liable to be dismissed - Appeal dismissed.

Summary

Issues Involved:
1. Whether the application filed by the first Respondent under Section 9 of the IBC is maintainable.
2. Whether there was a pre-existing dispute between the parties.
3. Whether the application is barred by limitation.
4. Validity of the Memorandum of Understanding (MoU) and the claim of coercion.

Issue-Wise Detailed Analysis:

1. Maintainability of the Application under Section 9 of the IBC:
The Appellant argued that the application filed by the first Respondent was erroneous in law and on facts. The Respondent's claim was based on an oral purchase order and invoices for mild steel billets supplied to the Corporate Debtor. The Appellant contended that the claims were time-barred and there was a pre-existing dispute. However, the Adjudicating Authority admitted the application, stating that the Corporate Debtor executed an MoU and issued cheques which were dishonored. The Tribunal found no merit in the Appellant's argument that the application was not maintainable.

2. Pre-existing Dispute:
The Appellant claimed that there were pre-existing disputes, evidenced by pending civil suits and the Respondent's failure to take back inferior quality material. The Respondent denied these allegations, asserting that the disputes were raised only after the demand notice was issued. The Tribunal noted that the Appellant failed to provide evidence of coercion regarding the MoU and that the disputes raised were not genuine but mere bluster to avoid repayment. The Tribunal upheld the Adjudicating Authority's finding that there was no pre-existing dispute.

3. Limitation:
The Appellant argued that the Respondent failed to file the application within 60 days from the date of the notification (07.12.2016) as required. However, the Tribunal noted that the notification was amended on 29.06.2017, extending the deadline to 15.07.2017. The Respondent filed the application in May 2019, which was within the three-year limitation period from the date of default (04.04.2016). Therefore, the Tribunal concluded that the application was not barred by limitation.

4. Validity of the MoU and Coercion Claim:
The Appellant contended that the MoU dated 13.02.2016 and the blank cheques were obtained under coercion. The Tribunal examined the MoU and found no evidence of coercion. The MoU was signed by both parties, and there was no legal challenge to its validity. The Tribunal also noted that the Appellant failed to adhere to the MoU and the cheques issued were dishonored. The Tribunal upheld the Adjudicating Authority's finding that the MoU was valid and there was no coercion.

Conclusion:
The Tribunal found that the debt and default were established, and the application was filed within the limitation period. The Appellant's claims of pre-existing disputes and coercion were not supported by evidence. The Tribunal dismissed the appeal, affirming the Adjudicating Authority's order to admit the application under Section 9 of the IBC.