2022 (11) TMI 1156 - AT - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - application rejected on the ground of time limitation - HELD THAT - The reply affidavit filed by the Respondent wherein letter dated 04.04.2018 (Annexure-B at page 69 of the Reply) issued by the Respondent, it has been categorically stated that at that point of time it was constrained to issue an email communication to you dated 22.01.2012 asking to increase your man power strength and for completing the various job works as required by you to be completed within a specified period of time and further disputed that there is an unpaid amount of Rs. 1,98,95,546/- as reflected in the 78 number of invoices attached with the impugned notice as dealt with herein, all the alleged bills as raised by you started from 02.11.2010 ending 10.12.2012 and the payments as received by you were lastly on 11.02.2013 and so the alleged bills as raised by you were strictly barred by the laws of limitation and thus you are not entitled to any payment as allegedly claimed by the Appellant - the Appellant in his rejoinder stated that the Appellant as per the agreed terms, completed their works and the Respondent was constrained to engage third party contractor for execution of the balance work which was otherwise within the scope of work of the Appellant. There is dispute between the parties prior to filing Section 9 application regarding work in question and also invoices raised by the Appellant between 02.11.2010 to 10.12.2012 - there are no merit in the instant Appeal, the impugned order dated 19.01.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Guwahati Bench, Guwahati) in the petition is hereby affirmed - appeal dismissed.

Issues Involved:
1. Whether the petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) was time-barred.
2. Whether there was an acknowledgment of debt by the Corporate Debtor that could extend the limitation period.
3. Whether the principles of natural justice were violated by the Adjudicating Authority.
4. Whether there was a pre-existing dispute between the parties regarding the operational debt.

Detailed Analysis:

Issue 1: Time-Barred Petition
The Appellant, an Operational Creditor, filed a petition under Section 9 of the IBC claiming a sum of Rs. 1,95,28,552/- due from the Corporate Debtor for work done. The Adjudicating Authority rejected the petition, holding it was time-barred because the invoices were beyond three years from the date of filing the petition.

The Appellant argued that the Adjudicating Authority failed to consider that the Respondent was directed to produce records, and the Tribunal had previously allowed the continuation of the application under Section 9 of the IBC. The Respondent contended that the petition was filed after a lapse of three years from the last invoice date, making it barred by limitation.

Issue 2: Acknowledgment of Debt
The Appellant claimed that the Respondent had unequivocally admitted the debt through various emails and communications, which should extend the limitation period. The Appellant cited the Supreme Court judgment in "Dena Bank Vs. C. Shivakumar Reddy and Anr." which allows for a fresh period of limitation upon acknowledgment of debt in financial statements.

The Respondent denied any such acknowledgment, arguing that the emails and balance sheets did not constitute an admission of debt. The Adjudicating Authority, relying on the Supreme Court's judgment in "Babulal Vardharji Gurjar Vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr.," held that the claim was barred by limitation as there was no valid acknowledgment of debt.

Issue 3: Principles of Natural Justice
The Appellant alleged that the dismissal of the petition without proper hearing and without disposing of interlocutory applications was a gross violation of natural justice. The Respondent countered that the Adjudicating Authority had duly considered all documents and submissions before passing the order.

The Tribunal observed that the Adjudicating Authority had heard the parties and analyzed the documents, thus not violating principles of natural justice.

Issue 4: Pre-Existing Dispute
The Respondent argued that there was a pre-existing dispute regarding the work done and the invoices raised, which was evident from the communications and the need to engage third-party contractors. The Appellant denied these allegations, stating that the work was completed satisfactorily and the dispute was raised only to avoid payment.

The Tribunal noted that there was indeed a dispute between the parties prior to filing the Section 9 application, which further justified the dismissal of the petition.

Conclusion:
The Tribunal affirmed the order of the Adjudicating Authority, holding that the petition was time-barred, there was no valid acknowledgment of debt to extend the limitation period, the principles of natural justice were not violated, and there was a pre-existing dispute between the parties. The appeal was dismissed with no costs.

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