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2021 (12) TMI 630 - AT - 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 - HELD THAT - The Appellant has filed the I.A. No. 2685 of 2020 seeking leave of this Appellate Tribunal to place on record certain additional documents, in para 3 it has been stated that the form of email correspondences ranging from 03.11.2017 till 11.01.2019 exchanged between the Appellant and the Respondent with respect to the settlement of the outstanding amount due and payable to the Appellant - The order dated 06.10.2020 dismissing the Application under Section 9 of the IBC by the Ld. Adjudicating Authority, the Appellant checked its internal records and it transpired that the aforesaid emails correspondences were available in its data-based. It is quite evident from the said emails correspondences that the Respondent was engaging in settlement discussions with the Appellant towards the outstanding dues owed to it which were otherwise agreed by the Respondent. It transpires that the Respondent had admitted his liability and ready to make payments and revised settlement offer to the tune of USD 99,786.41/- was offered by the Respondent to the Appellant - the Application under Section 9 of the IBC filed by the Appellant before the Ld. Adjudicating Authority is hereby allowed.
Issues Involved:
1. Whether the application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, filed by the Operational Creditor, was barred by limitation. 2. Whether the acknowledgments of debt by the Corporate Debtor extended the period of limitation. 3. Admissibility of additional documents as evidence. Issue-wise Detailed Analysis: 1. Barred by Limitation: The National Company Law Tribunal (NCLT) dismissed the application filed by the Operational Creditor under Section 9 of the IBC on the grounds that it was barred by limitation. The application was filed on 30.06.2020, while the date of default was considered to be 23.05.2014, the date on which the last invoice fell due. The NCLT held that the application was beyond the three-year limitation period. 2. Acknowledgment of Debt Extending Limitation Period: The Operational Creditor argued that the period of limitation was extended due to acknowledgments of debt by the Corporate Debtor. The key acknowledgments cited were: - On 18.01.2016, the Corporate Debtor confirmed the outstanding amount of USD 1,261,955.40 as of 31.12.2015. - On 02.02.2017, the Corporate Debtor again confirmed the outstanding amount of USD 901,955.40 as of 31.12.2016. - On 15.10.2018, the Corporate Debtor proposed a settlement payment of USD 85,526.11, which was revised to USD 99,786.41 on 10.11.2018. The Appellate Tribunal held that these acknowledgments extended the limitation period, making the application filed on 30.06.2020 within the permissible period. The Tribunal referenced the judgment in Bishal Jaiswal Vs. Asset Reconstruction Company (India) Limited, which confirmed that Section 18 of the Limitation Act, 1963, applicable to insolvency cases, extends the limitation period upon acknowledgment of debt. 3. Admissibility of Additional Documents: The Operational Creditor sought to introduce additional documents, specifically email correspondences, as evidence of the acknowledgment of debt. The Corporate Debtor opposed this on the grounds that these documents were electronic and lacked the certification required under Section 65B(4) of the Evidence Act. The Tribunal permitted the inclusion of these additional documents, noting that they were crucial to establishing the acknowledgment of debt and thus relevant to the case. Findings and Order: The Appellate Tribunal found that the NCLT erred in dismissing the application as time-barred. The Tribunal held that the acknowledgments of debt by the Corporate Debtor extended the limitation period, making the application under Section 9 of the IBC timely. The order dated 06.10.2020 by the NCLT was set aside, and the application by the Operational Creditor was allowed. The Tribunal directed both parties to appear before the NCLT on 18.01.2022 for further proceedings, including the appointment of an Interim Resolution Professional. Conclusion: The Appellate Tribunal concluded that the application under Section 9 of the IBC was not barred by limitation due to the acknowledgments of debt by the Corporate Debtor. The additional documents were admitted as evidence, and the case was remanded to the NCLT for further proceedings.
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