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TMI Blog2025 (1) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/ND/2023 against M/s India Offset Printers Private Limited / Corporate Debtor ("CD") is being challenged. The impugned order admits a petition under Section 9 of IBC 2016, filed by the Respondent/Operational Creditor ("OC") namely M/s Silverline Graphics Private Limited. Submissions of the Appellant / Jagdish Prasad Sharma 2. It is contended by the Appellant that majority of the invoices relied by the Operational Creditor / Respondent No.1 are for the year 2016-2019. As per these invoices, they were due on the same day. Therefore, limitation period in relation to the said invoices has lapsed. The Adjudicating Authority has relied on Section 19 of the Limitation Act, 1963 and has held that since part payments have been made, a fresh period of limitation starts. Since the Appellant has not acknowledged the debt fresh limitation cannot be stated to run against the alleged debt under Section 19 of the Limitation Act, 1963. It is unclear that the said payments have been made towards the alleged debt as claimed by the Operational Creditor. The promoters of the Operational Creditor and the Corporate Debtor were not restricted to a single isolated transaction - which is supply of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UV transfer coatings for packaging & commercial print. Pursuant to the discussions between the parties, the Operational Creditor supplied printing and other allied material to the Corporate Debtor. Neither the quality nor quantum of material supplied was disputed. Even the reply to the demand notice raises no dispute. 8. The Appellant and the Corporate Debtor had a running account cannot be in dispute. The amount of Rs. 2,41,15,076/- is owed to the OC which is clear and not disputed. The nature of a 'running account' has been considered by the Hon'ble NCLAT to mean that there must be "...'Debits' and 'Credits' entries going on simultaneously or on a regular basis and the balances are struck with some periodicity..." The ledger statement filed reflects part payments by the Operational Creditor to the Corporate Debtor in the 'Credit' column. Further, the Corporate Debtor has in its Reply demonstrated that the account maintained by the parties was a running account. The chart filed by the Corporate Debtor itself reflects continuous payments to the Operational Creditor, the last part-payment having been made on 02.03.2022. The chart also reflects the part-payments having been made ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor is outside the scope of Section 9 IBC, when Operational Creditor and Corporate Debtor are separate corporate legal entities different from its promoters/directors/shareholders. A pre-existing dispute has to relate to the debt which is the subject matter of the application. The purported dispute does not relate to the subject matter of the present proceedings. Therefore, there is no merit in the CD's submissions. 13. In the facts and circumstances, it is prayed that there is no merit in the CD's submissions and the appeal may be dismissed. Appraisal 14. This appeal by Mr. Jagdish Prasad Sharma (suspended Management) arises from the order of the Adjudicating Authority admitting the Section 9 application filed by M/s Silverline Graphics Private Limited / Respondent No.1 / Operational Creditor (OC) against M/s India Offset Printers Private Limited / Corporate Debtor (CD). The Corporate Debtor has challenged the said order, primarily on grounds of pre-existing disputes, non-existence of debt and limitation. 15. Heard the counsels and perused material on record. 16. Basis the material on record and submissions, following issues emerge: whether there is a pre-existing dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 2021. It is observed that the Corporate Debtor has neither disputed the receipt of goods nor the receipt of invoices rather acknowledged the same by counter-signing the said invoices. Further, the Corporate Debtor has made several part-payments to the Operational Creditor from 2017 to 2022 in regard to the invoices so raised. The last part-payment was made on 02.03.2022, which reflects the 'acknowledgement of debt' on the part of the Corporate Debtor. Furthermore, on the consideration of the transactional invoices, as annexed by the Operational Creditor, and placed before us, we are of the view that there had been a transaction between the Operational Creditor and the Corporate Debtor and that the Operational Creditor has supplied goods to the Corporate Debtor and therefore, is claiming the payment in respect of the invoices so raised. Hence, this Adjudicating Authority is inclined towards believing that the debt claimed by the petitioner for provision of pharmaceutical products comes under the purview of 'Operational Debt' within the meaning of Section 5(21) of the Code." 20. The above finding of the Adjudicating Authority rejecting the existence of pre-exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that this is a manufactured Section 9 petition. 23. It is to be noted that this dispute is also reflected in the information utility which is at page 67-68 of the Appeal Paper Book. Default is recorded in the information utility i.e. NeSL by promoter of OC i.e. Lalit Mohan Bhagat and not the OC. Also the Corporate Debtor had disputed the default on 11.10.2023, as is reflected in the status of the Information Utility (NeSL). 24. The prevailing dispute between the parties is also noted from the proceedings of Hon'ble Delhi High Court in CS (Comm.) No.825 of 2022, which was filed by the Petitioner/Appellant. From the material or record in the Appeal Paper Book, it is contended by the Corporate Debtor that the Operational Creditor and the Promoters of Operational Creditors are occupying the property of the Corporate Debtor and promoters of Corporate Debtor as a tenant and the goods supplied by the Operational Creditors were being adjusted against the rent. And they were liable to pay rent to Promoter of the Corporate Debtor. When they stopped paying rent, multiple litigations were filed between the parties and the present petition is one of those litigations. 25. Thus, in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequent paragraphs to unearth the real nature of transactions between the two parties. 27. The issue of running account has been dealt in by the Adjudicating Authority in para 12 which is reproduced as follows: ".... 12. Additionally, the Corporate Debtor had also contended that the invoices are raised from the year 2016 till 2021, and the due date mentioned on the invoice is same as the date of the invoice and the present petition has been filed on 21.09.2023, therefore, some of the invoices have become time barred. In this regard, it is observed that the Operational Creditor had maintained a running account with regard to the payments received by the Corporate Debtor. The term "same date" as the due date merely signifies that the debt has become due from that date and the fact that the due date mentioned on the invoice is the "same date" as of the date of the invoice does not rule out the possibility of the maintenance of the running account between the parties. Further, considering the pattern of the payments made by the Corporate Debtor, the nature of transaction appears to be that of running account only. Further, as per the records, it is observed that the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h relate to the supply of goods - and some of which is related to the payment of rent for the premises occupied by the Operational Creditor. Some transactions also relate to payment through RTGS and without any purpose and some have been returned in cash. This indicates complex nature of transactions between Operational Creditor, Promoters of Operational Creditor, Corporate Debtor and Promoters of Corporate Debtor. If the nature of transactions has to be gone into, as indicated by the Adjudicating Authority, then we cannot conclude it to be a running account for the supply of goods and its payments alone. It has many more transactions not only between the Corporate Debtor and the Operational Creditor but also between the Promoters. The argument of the Operational Creditor that both are separate legal entities, and the transactions other than these legal entities is not tenable in such a situation. The veil of Corporate Debtor has to be pierced in such a situation. Therefore, the Order of the Adjudicating Authority, which is more on the basis of presumptions, doesn't stand the scrutiny basis materials on record. 31. Basis above analysis we find that there are multiple transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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