2023 (8) TMI 549 - SCH - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - claim was barred by limitation since the default had occurred over three years prior to the filing of the petition under Section 9 of IBC - HELD THAT - It emerges from the record that while the adjudicating authority dismissed the company petition on the ground of limitation, the appellate authority has affirmed the judgment of the adjudicating authority primarily on the ground that there was a pre-existing dispute and on limitation - From the narration of the facts, it appears to this Court that the appellant has a serious grievance on whether the order of the adjudicating authority for the production of documents was complied with. Production of documents was sought to establish that there was an acknowledgment of debt. The impugned order of the NCLAT has not entered any finding of fact on whether there was compliance of the order for production of documents. Though it was urged by the respondent that the order for production of documents had been complied with, no expression or opinion expressed on finding by the NCLAT on this aspect of the matter. Matter restored back.

Summary

Issues:
1. Dismissal of petition by NCLT on grounds of limitation
2. Compliance with order for production of documents
3. Dismissal of company petition by newly constituted Bench without adequate hearing
4. Affirmation of judgment by appellate authority on grounds of pre-existing dispute and limitation

Analysis:

1. The appellant, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code 2016, which was dismissed by the NCLT on 19 January 2021 due to being time-barred as the default occurred over three years prior to the filing.

2. An interim order was passed by the NCLT on 25 October 2019, directing the respondent to produce necessary documents for perusal. The NCLAT upheld this order on 25 November 2019. The appellant claimed non-compliance by the respondent, while the respondent contended that the order was indeed followed.

3. The appellant filed interlocutory applications for document production and contempt of orders, which were reserved for orders by the NCLT. However, the newly constituted Bench dismissed the company petition for delay without giving a proper hearing, leading to the appellant's grievance.

4. The appellate authority affirmed the NCLT's judgment based on a pre-existing dispute and limitation, without addressing the compliance of the document production order. The Supreme Court set aside the NCLAT's order and remanded the appeal for fresh disposal, keeping all rights and contentions open for adjudication. The Court highlighted the importance of determining compliance with the document production order to establish an acknowledgment of debt, indicating a serious grievance by the appellant.