2020 (3) TMI 664 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - There is no proof of any acknowledgement of liability on the part of the Corporate Debtor or any payment made by the Corporate Debtor within the limitation period that may have the effect of extending the period of limitation within the meaning of section 18 or section 19, as the case may be, of the Limitation Act, 1963. The dates of default in respect of the five invoices range between 29.03.2014 and 13.08.2014. Even if we take the last of the dates, i.e., 13.08.2014, the three-year limitation in terms of article 137 of the Limitation Act, 1963, for filing the present proceeding ended on 12.08.2017, while the present petition was filed on 15.05.2018. This Petition is barred by limitation - Petition dismissed.

Summary

Issues:
- Alleged default date discrepancy
- Lack of proof of invoice service
- Lack of proof of demand notice service
- Time-barred debt consideration

Analysis:

Alleged Default Date Discrepancy:
The Company Petition under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) was filed by the Operational Creditor against the Corporate Debtor for non-payment of a substantial amount. The Operational Creditor claimed a default date of 26.03.2014, but the Tribunal found discrepancies in the default date calculation based on the invoices provided. The Tribunal analyzed the grace period for payment and concluded that the actual default date ranged between 01.04.2014 and 13.08.2014, not 26.03.2014 as claimed.

Lack of Proof of Invoice and Demand Notice Service:
The Tribunal noted the absence of concrete evidence regarding the service of invoices and the demand notice on the Corporate Debtor. There was no proof of acknowledgment of receipt through signatures, Delivery Challans, or Lorry Receipts attached to the Petition. Similarly, there was a lack of evidence showing the service of the Demand Notice in the form of postal receipts, acknowledgment cards, tracking reports, or hand delivery.

Time-Barred Debt Consideration:
In considering the debt's status as time-barred, the Tribunal referred to legal precedents, including the B.K. Educational Services case and Sagar Sharma v. Phoenix ARC case. The Tribunal highlighted that the Limitation Act is applicable to IBC applications, and as per article 137 of the Limitation Act, the right to sue accrues when a default occurs. The Tribunal determined that the present petition, filed on 15.05.2018, was barred by limitation as the three-year limitation period ended on 12.08.2017, based on the latest default date of 13.08.2014. Consequently, the Tribunal dismissed the Petition as time-barred.

Conclusion:
The Tribunal dismissed the Company Petition as it was barred by limitation, emphasizing that the observations made should not affect the Operational Creditor's rights in pursuing legal remedies through other judicial forums or laws. The order was communicated to the parties in compliance with the provisions of the IBC.