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2021 (11) TMI 194 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - issuance of demand notice - time limitation - HELD THAT - Admittedly, the invoices pertain to the period from November 2013 to February 2014 and were part of the undated demand notice under Section 8 of IBC sent by the Petitioner - The law with respect to 'date of default' and 'limitation' under IBC has been clearly laid down by Hon'ble Supreme Court in several judgments and since the Limitation Act 1963 is applicable to applications filed under Sections 7 and 9 of IBC from the inception of IBC therefore, Article 137 of the Limitation Act 1963 gets attracted. The Petitioner has filed the present petition on 30.01.20 and also failed to file any application for condoning the delay. Thus, three years from the date when the right accrues is the period when OC gets the right to trigger CIRP. The existence of debt and default on the part of the CD cannot be established as the due debt is stated to be on 03.03.14, which is barred by limitation period which expired in the year 2017. The present Petition deserves to be dismissed without going into merits of the case - Petition dismissed.
Issues:
Petition filed by Operational Creditor seeking initiation of Corporate Insolvency Regulation Process against Corporate Debtor under Section 9 of IBC - Alleged default in settling amount - Barred by limitation or not. Detailed Analysis: Issue 1: Petition filed by Operational Creditor under Section 9 of IBC The petition was filed by Brandbaron Marketing Pvt. Ltd., an Operational Creditor, seeking initiation of Corporate Insolvency Regulation Process against Times Internet Ltd, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The alleged default amount was &8377; 87,81,526, with &8377; 36,58,982 as the principal amount. The default was related to assignments for providing services like exhibitions, promotion, and supply of materials, as per the Service Agreement executed between the parties. Issue 2: Alleged default and response of the Corporate Debtor The Corporate Debtor responded to the demand notice by stating that there was no debt due or default on their part. They mentioned pre-existing disputes, unethical practices by the Operational Creditor, and disputed the claim related to work carried out without separate purchase orders. The Corporate Debtor did not file a reply to the petition until the Order was reserved. Issue 3: Barred by Limitation The key issue was whether the petition was barred by limitation. The invoices in question were dated from November 2013 to February 2014, and the due date was contended to be 03.03.14. As per the Limitation Act 1963, Article 137 applies to applications under Sections 7 and 9 of IBC, providing a limitation period of 3 years. Since the right to trigger CIRP accrues after three years, the petition filed in 2020 was deemed barred by limitation as the due debt date of 03.03.14 had expired in 2017. Conclusion The Tribunal dismissed the petition without delving into the merits of the case due to it being barred by limitation. The Registry was directed to communicate the order to the parties promptly. The judgment highlighted the importance of adhering to limitation periods in insolvency proceedings and the significance of timely filing petitions under the IBC. This detailed analysis covers the key issues involved in the legal judgment, providing a comprehensive understanding of the case and the Tribunal's decision.
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