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TMI Blog2020 (10) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... the existence of dispute or the documents regarding the payment of debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice and raised the disputes, hence after his appearance in response to the notice, he cannot raise it by filing the reply to the application filed on behalf of the operational-creditor Mere plain reading of the provision shows that when the payment of account of debt or of interest is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorized in this behalf, a fresh period of limitation shall be computed on the time when the payment was made. Here in the case in hand, all the invoices are in between 3rd September, 2015 to 30th November, 2015, whereas the last payment was made on 18th January, 2017 which is within 3 years from the date of issuance of the invoices as required under article 137 of the Limitation Act, therefore, the last payment was within 3 years from the date of the issuance of the invoice - limitation runs from the last date of payment and when we shall count the date of limitation from 18th January, 2017 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or. It may kindly be noticed that the Operational Creditor has filed its account statement, starting from 01.10.2015 till filing of the petition. The said account statement has been spread out in three volumes with the petition. Incidentally they have however not filed the account statement of about six months in between. As per examination of page 466, it discloses that the last entry is of 31.05.2016. Thereafter at the very next page 467, the entries start from 02.01.2017. Therefore, there is a gap of about six months in the account statements filed by the Operational Creditor. The Operational Creditor has purposely avoided to file the bank statement for the aforesaid six months, since a lot of payments had been made by the Pathya Pustak Adhikari (Text Book Officer), Govt. of Uttar Pradesh, directly to the Operational Creditor, which in apprehension of Corporate Debtor was done during the said period. Hence there is no clues against the Corporate Debtor and in favour of Operational Creditor. Thus the petition is not in compliance of obligatory requirements of Section 9(3)(c) and deserves to be dismissed. c) Further, the transaction between the parties was also dependent upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to the contention of Corporate Debtor in the same and so the Operational Creditor himself had violated the terms of agreement between the parties due to which a penalty was imposed by the Govt. The Department and therefore the Corporate Debtor was compelled to terminate the contract between the parties and intimate the Operational Creditor that a full and final payment is being made on 18.01.2017, to which again the Operational Creditor did not respond. g) That the Operational Creditor in the petition has submitted that they originally raised ten invoices, all between 03.09.2015 and 30.09.2015. Thus they have admitted that the invoices were of September 2015 only. Thereafter it has been alleged that the reminders of these invoices were sent on 16.03.2017, 09.10.2017 and finally on 30.10.2017 i.e. after a delay of about two years. Thus the application is time barred, since the cause of action for filing of the application accrued in 2015 itself, whereas the present application has been filed on 06.09.2019 (as mentioned in the copy provided to the Corporate Debtor). The application therefore has been filed after four years of raising of invoices and therefore the same is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the specifications mentioned by the Govt. department, a letter dated 12.06.2015, was sent to the Corporate Debtor by the Department whereby the Department warned the Corporate Debtor that since the Operational Creditor, namely, BurdaDruck India Pvt. Ltd. had not started the printing of books till that time, the delayed payment etc. would have been the responsibilities of the Corporate Debtor. The letter clearly stipulates that on inspection it had been found by the Department that at least till 12.06.2015, no steps for printing of books were undertaken by the Operational Creditor. A copy of this letter was immediately forwarded by Corporate Debtor to Operational Creditor. A copy of letter dated 12.06.2015 along with its translated copy has been filed as Annexure R-3. k) On 04.07.2015 the Department again informed the Corporate Debtor that the Operational Creditor has not been complying with the timeline provided in the contract and the supply of books is very late. The Department gave a strict warning to the effect, that if the timeline provided in the contract is not met, the Department may place the entire project to the tender evaluation committee, which may take coercive s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the application, reply, rejoinder to the reply and additional affidavit along with documents filed on behalf of the applicant as well as written submission filed on behalf of both the parties. 5. Learned Counsel appearing for the Applicant, in course of his argument submitted that in pursuance of the demand notice issued under Section 8(1) of the IBC, no dispute has been raised on behalf of the Corporate Debtor and Corporate Debtor, at a belated stage, by filing the reply raised the disputes which cannot be entertained in view of Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software (P) Limited. He further submitted that all the allegations of non-payment and none supply of the books is false. 6. He further submitted that the disputes regarding the quality of delayed supply are without any documents and proof and in the absence of pleading to the contrary, the same cannot be taken into consideration. He further submitted that the Operational Creditor has invoked the arbitration clause after the filing of this application, so, it cannot be said that there is a dispute prior to the filing of this application. 7. He further submitted that the Operational Creditor constra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el appearing for the Respondent, in course of his argument submitted that during the pendency of the present proceeding, Operational Creditor has sent a notice under Section 21 of the Arbitration and Conciliation Act, 1996, invoking the arbitration clause and on the basis of that the Learned Counsel appearing for the Corporate Debtor submitted that since a dispute is raised after the filing of this application, therefore, the present application is not maintainable. He further submitted that the present application is also not maintainable because the Operational Creditor has failed to comply with the obligator}/requirements of Section 9(3)(c). He further submitted that in order to prove default by the Corporate Debtor, the Operational Creditor needs to show the existence of the debt and non-payment, of the debt. In this case the Operational Creditor has failed to adduce enough evidence to convince the Hon'ble Tribunal about the existence of a debt. The Operational Creditor has filed some alleged invoices but none of these alleged invoices are valid and legal, since the same are not supported by proof of delivery. 12. He further submitted that the payment to the Operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor - (a) Existence of a dispute, 1[if any, or] record of the pendency of the suit or arbitration proceedings filed, before the receipt of such notice or invoice in relation to such dispute; (b) The [payment} of unpaid operational debt- (i) By sending an attested copy of the record of electronic transfer of the unpaid, amount from the bank account of the corporate debtor; or (ii) By sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. Explanation. -For the purposes of this section, a demand notice means a notice served by an operational creditor to the corporate debtor demanding 3[payment] operational debt in respect of which the default has occurred. Section 9: Application for initiation of corporate insolvency resolution process by operational creditor. - (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the corporate debtor, if - (a) 'The application made under sub-section (2) is incomplete; (b) There has been 1 [payment] of the unpaid operational debt; (c) The creditor has not delivered the invoice or notice for payment to the corporate debtor; (d) Notice of dispute has been received by the operational creditor or There is a record of dispute in the information utility; or (e) Any disciplinary proceeding is pending against any proposed resolution professional: Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section. 15. Mere plain reading of the provisions contained under Section 8 9 of the Code shows that on the occurrence of a default, the operational-creditor is required to deliver a demand notice of unpaid operational debt or copy of the invoice demanding payment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction which attributes redundancy to the legislature will not be accepted except for compelling reasons such as obvious drafting errors. 17. In the light of that decision, when we shall consider the case in hand then we are of the considered view that since it is specifically mentioned in Section 8(2) of the Code that within ten days from the date of the receipt of the demand notice, the corporate-debtor is required to bring to the notice of the operational-creditor, the existence of dispute or the documents regarding the payment of debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice and raised the disputes, hence after his appearance in response to the notice, he cannot raise it by filing the reply to the application filed on behalf of the operational-creditor and this has also been held by another NCLT, Delhi Bench in the case of M/s. Jai Laxmi Traders v M/s. Mayasheel Retail India Ltd. IB-2184/(ND)/2019. 18. Now, coming to the point of limitation, at this juncture, in course of hearing, Learned Counsel appeared for the Corporate Debtor submitted that the application is barred by limitation because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, in view of the Section 19, we are of the considered view that limitation runs from the last date of payment and when we shall count the date of limitation from 18th January, 2017 then we find that the present application is filed on 11th September, 2019, therefore, it is within 3 years from the date of last payment made by the Corporate Debtor. 23. Hence, we find, no force in the contention raised on behalf of the Learned Counsel appeared for the Corporate Debtor that present application is barred by limitation, rather, we are of the considered view that from the date of last payment that is from 18 January, 2017, the present application is within time. 24. For the reasons discussed above, we are of the considered view that in view of Section 9(5)(i)(a) since the application is complete, there is no payment of unpaid operational debt, which is more than ₹ 1 Lakh, which is the minimum threshold U/S 4 of the Code for initiating a proceeding U/S 9 of the Code and no notice of dispute as required U/S 8(2) of the Code is raised by Corporate Debtor. Therefore, we think it is proper to admit the application. 25. Accordingly, this petition is admitted. A moratorium in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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