2019 (3) TMI 195 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Outstanding debt - HELD THAT - The communication dated 18.11.2015 placed of the typed set filed with the Rejoinder is concerned, it has neither been sent on the letterhead of the Corporate Debtor nor signed by its Managing Director. The documents dated 04.03.2014 and 26.04.2014 appear to be genuine. However, the document dated 18.11.2015 is not having any credentials for being admitted as genuine because neither it has been sent on the letterhead of the Corporate Debtor nor was signed by its Managing Director. In the circumstances, the last date of balance confirmation is being treated as 26.04.2014 and the Application under Section 9 has been filed on 21.02.2018 which is being filed after the expiry of the period of limitation and the same is barred by the law of limitation. Therefore, this issue is decided against the Operational Creditor and in favour of the Corporate Debtor. In relation to the 2nd issue, the Corporate Debtor has clearly brought out the factual details in its Reply Statement and has proved that the amounts claimed by the Operational Creditor, on the basis of the Invoices the detail of which is placed at page 16 of the typed set filed with the Application, have been paid through RTGs except Invoice No. 456, the amount of which was paid in cash. The Corporate Debtor has also placed the original documents pertaining to the payments made against the Invoices, the detail of which is given under Para 13 at Table A of the Reply Statement. Cash Payment Advices with regard to which this Authority has suggested the Operational Creditor that the original documents need to be sent to the Handwriting Expert as the signatures of the authorized signatory of the Operational Creditor are being disputed by the Operational Creditor. But, the same has been refused and the Handwriting Expert s opinion placed on record is not inspiring the confidence of this Authority, as the opinion has been formed on the basis of the scanned copies, photo state etc. Therefore, the 2nd issue is also decided against the Operational Creditor and in favour of the Corporate Debtor. Application filed under Section 9 of the I&B Code, 2016 by the Operational Creditor is devoid of merits and the same stands dismissed.

Summary

Issues Involved:
1. Whether the Application filed by the Operational Creditor under Section 9 of the I&B Code, 2016 is time-barred?
2. Whether the Corporate Debtor has proved the payments pertaining to the Invoices, as claimed by the Operational Creditor?

Analysis:

Issue 1: Time-Barred Application
The Operational Creditor filed an application under Section 9 of the I&B Code, 2016 seeking to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor. The Operational Creditor claimed an outstanding amount, but the Corporate Debtor contended that the claims were false and malicious. The Corporate Debtor argued that the application was time-barred as per the Limitation Act, 1963. The Tribunal noted that the last date of balance confirmation was in April 2014, and the application was filed in February 2018, exceeding the limitation period. Citing the Supreme Court judgment in B.K. Educational Services (P.) Ltd., the Tribunal held the application to be time-barred, ruling in favor of the Corporate Debtor.

Issue 2: Proof of Payments
The Corporate Debtor provided evidence that payments for the Invoices claimed by the Operational Creditor had been made, except for one invoice. The Corporate Debtor submitted original documents supporting the payments, including Cash Payment Advices. The Operational Creditor disputed the authenticity of the Cash Payment Advices and sought a handwriting expert's opinion. However, the Operational Creditor failed to provide the original documents for examination, leading to doubts about the authenticity of their claims. The Tribunal found in favor of the Corporate Debtor on this issue as well, as the Operational Creditor's evidence lacked credibility.

Conclusion
The Tribunal dismissed the Operational Creditor's application under Section 9 of the I&B Code, 2016, ruling that it lacked merit and was devoid of legal grounds. The judgment highlighted the importance of meeting legal requirements and providing credible evidence in insolvency proceedings. No costs were awarded, and the order was pronounced in open court in the presence of both parties' counsels.