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TMI Blog2022 (8) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence is barred as being out of limitation. The Adjudicating Authority has correctly dismissed the section 9 application filed by the Appellant - Appeal dismissed. - Company Appeal ( AT ) ( Insolvency ) No. 1412 of 2019 - - - Dated:- 26-8-2022 - ( Justice Rakesh Kumar Jain ) Member ( Judicial ) And ( Dr. Alok Srivastava ) Member ( Technical ) For the Appellant : Mr. Neeraj Malhotra , Sr. Advocate with Mr. Rachit Devgun , Mr. Nimish Kumar and Mr. Seemant K. Garg , Advocates For the Respondent : Mr. Aneesh Sharma , Mr. Sanjay Jain and Mr. Akash Srivastava , Advocates JUDGMENT ( Per : Dr. Alok Srivastava ) This appeal has been preferred by the Appellant under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called IBC ) aggrieved by the Order dated 24.09.2019 (hereinafter called Impugned Order ) passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi) in CP No. 1743/ND/2018 whereby the application filed by the Appellant under section 9 was dismissed as being barred by limitation. 2. In brief, the Appellant s case is that he supplied CRGO Lamination for transformers to Respondent (M/s. PME Power Solutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Learned Counsel for Appellant has argued that CRGO Laminations were supplied by the operational creditor to the corporate debtor, for which invoices were issued during the period 13.8.2015 to 13.3.2016. He has based his arguments on the purchase order (attached at pp. 85-86 of the appeal paperbook) dated 15.7.2015 for which the corresponding tax invoice (attached at pg. 96 of the appeal paperbook). He has argued that the tax invoice mentions that 90 days (60 days interest to buyers account @ 10.5% p.a.) , which means that the purchaser will issue a Letter of Credit for 90 days and the supplier is entitled to receive interest for 60 days @ 10.5% p.a. He has also argued that the Bill of Lading dated 13.8.2015 (attached at pg. 98 of appeal paperbook) shows that a total of 20,474 kg. gross weight of CRGO Lamination was delivered to the corporate debtor. There are similar purchase orders and deliveries (made by the supplier) for which tax invoices have been issued (copies of purchase orders, tax invoices and bills of lading of the deliveries made are attached at pages 85-113 of appeal paperbook). 6. The Learned Counsel for Respondent has further argued that the corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He has pointed out that in the present case the corporate debtor did not reply to the demand notice issued under section 8, and later on did not either reply or repudiate the e-mail dated 1.6.2016, and therefore, an adverse inference should be drawn against him, which implies a deemed acknowledgment of the said operational debt. 8. The Learned Counsel for Appellant has made an alternative argument that even if it is assumed that the date of last payment is 4.9.2015, the period of 90 days which is allowed for issue of letter of credit by the corporate debtor (as included in the Tax Invoices) the period for making the payment expires on 2.12.2015, where after the debt is in default and becomes due for payment. The three-year period of limitation would therefore run till 1.12.2018. He has argued that the section 9 application was filed on 4.12.2018 i.e. after a delay of three days, hence the Adjudicating Authority should have given him a reasonable opportunity to file an application for condonation of delay, which was not done. 9. In support of his contention, the Learned Counsel for Appellant has cited the order of Hon ble Madhya Pradesh High Court in the matter of Madhya Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of S.M. Ghogbhai vs. Schedulers Logistics India Pvt. Ltd. [CA(AT)(Ins.) No. 281 of 2022] that the limitation for a section 9 application is governed by Article 137 of the Limitation Act, and the time from which the limitation period begins to run is when invoices issued by the operational creditor to the corporate debtor are in default of payment. In this case, an application not filed within the three years limitation period was considered to be barred by limitation and therefore dismissed. 12. Lastly, the Learned Counsel for Respondent has argued that since date of default as mentioned in the demand notice under section 8 is 30.4.2015, the period of three years will expire on 29.4.2018, and thus the application under section 9 is hopelessly barred by the limitation in the absence of any application filed under section 5 of the Limitation Act, which could have led to condonation of delay after due consideration. 13. In the Impugned Order, the Adjudicating Authority has considered the date of last payment made by the corporate debtor i.e. 15.10.2015 as the date of default. The petition was filed on 4.12.2018, which is more than three years after the date of default an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d below for ready reference:- 8. Insolvency resolution by operational creditor. - (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. (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 cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d if before the expiration of the 3 years period, an acknowledgment has been made in writing signed by the party against whom such property or right is claimed. In the present case, we note that even though the operational creditor sent an e-mail dated 1.6.2016 mentioning the outstanding amount for payment, and debit note was also included in the ledger account dated 31.3.2016, no acknowledgement of the liability has been made in writing by the corporate debtor. In such a situation, the date of default has to be computed from the date of last payment i.e. 4.9.2015. Accordingly, the three years period shall be over on 3.9.2018 and since the application under section 9 was filed on 4.12.2018, it is clearly beyond the period of limitation and hence is barred as being out of limitation. 20. The decision of Hon ble High Court of Madhya Pradesh in the matter of Madhya Pradesh Grih Nirman Mandal (supra) regarding providing an opportunity to the Appellant to explain the delay as provided in section 5 of the Limitation Act before dismissing the appeal on the ground of limitation is concerned, we find that the Appellant did not seek permission of the tribunal to file an application under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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