2024 (9) TMI 1178 - AT - IBC

Application under Section 9 of the IB Code, 2016 - default in respect of the work done qua fabrication and erection of steel structure at the plant of the Corporate Debtor situated in Meghalaya - time limitation - HELD THAT - Admittedly on 03.12.2020 the Respondents have filed the requisite documents as were required vide order 25th October, 2019 and these are annexed as Annexure C to the reply to this appeal. The appellant was, therefore, required to inspect the documents and to pinpoint any document to show any acknowledgement upon the part of the Respondent to its debt after the year 2013. The matter was listed three times thereafter and only written submissions have been filed by the appellant, reiterating the same issue without identifying the exact document to show any acknowledgement of debt by the corporate debtor in the financial documents filed by the appellant since the year 2011-12 till 2017-18 and hence no further opportunity can be granted now. The appellant was not able to identify any entry in the trial balance or in the balance sheet or in other documents which could serve the purpose of acknowledgement of debt and thereby extension of limitation period, and hence we find no force in the appeal and the same is accordingly dismissed for the reasoning given in the order dated 25th November, 2022. Appeal dismissed.

Issues:
1. Application under Section 9 of the IB Code, 2016 filed by Operational Creditor against Corporate Debtor for defaulting payment.
2. Dispute regarding the application being barred by limitation.
3. Appeal against the order of the Adjudicating Authority dismissing the main petition.
4. Compliance with the order for production of documents.
5. Appeal filed before the Hon'ble Supreme Court against the dismissal of the appeal by the Tribunal.

Issue 1: Application under Section 9 of the IB Code, 2016:
The Operational Creditor filed an application under Section 9 of the IB Code, 2016 against the Corporate Debtor for defaulting a sum of Rs.1,95,28,552 due in relation to work done for fabrication and erection of steel structure at the Corporate Debtor's plant in Meghalaya. The Operational Creditor raised 81 invoices for the work done and the amount due, alleging that demands were made from 2013 to March 2018, leading to the application under Section 9 of the IB Code, 2016.

Issue 2: Dispute on Limitation:
The main defense raised by the Corporate Debtor was that the application was barred by limitation. Initially, the appellant argued that the company petition was filed within three years from the coming into force of the IB Code, 2016. However, following a Supreme Court judgment, it was established that the law of limitation applies from the date of default. The appellant sought to bring on record financial statements to show that the claim was within limitation, but the application was dismissed by the Adjudicating Authority. The Tribunal affirmed the dismissal, stating that the application was barred by limitation based on the judgments of the Hon'ble Supreme Court.

Issue 3: Appeal against the Order of the Adjudicating Authority:
The appellant filed an appeal against the order of the Adjudicating Authority, seeking the production of financial documents by the Corporate Debtor. The Tribunal allowed the appellant to file necessary documents to establish the claim was within limitation. However, the Adjudicating Authority later dismissed the main petition under Section 9 of the IBC, 2016 without discussing the impact of the financial statements, leading to the dismissal of the appeal by the Tribunal.

Issue 4: Compliance with the Order for Production of Documents:
The Hon'ble Supreme Court noted a dispute regarding compliance with the order for the production of documents to establish an acknowledgment of debt. The NCLAT did not provide any finding on whether the order for production of documents was complied with, leading to the setting aside of the NCLAT's order for further consideration. The appellant failed to identify any document showing acknowledgment of debt in the financial documents filed by the Corporate Debtor, resulting in the dismissal of the appeal.

Issue 5: Appeal before the Hon'ble Supreme Court:
The appellant filed an appeal before the Hon'ble Supreme Court, which found that the appellant failed to identify any document showing acknowledgment of debt in the financial documents filed by the Corporate Debtor. The Court set aside the NCLAT's order and restored the appeal for fresh disposal, keeping all rights and contentions of the parties open for adjudication.

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