2020 (10) TMI 443 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT - It is a settled principle that any proceedings under Section 7 9 and 10 of IBC 2016 before this Tribunal is summary in nature and this Tribunal like a Civil Court cannot indulge in the luxury of taking evidence oral or otherwise as to its existence - Further in the present case the debt fell due on 22.11.2012 and for the sake of argument if the acknowledgement of debt is taken to be obtained from Corporate Debtor on 31.03.2016 the same falls beyond the 3 years period of limitation and as such the same has not been obtained before the expiration of the prescribed period. The debt which is being claimed to be in default from the Corporate Debtor is barred by limitation - petition dismissed.

Summary

Issues:
1. Application under Section 9 of the Insolvency & Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP).
2. Determination of liability of the Corporate Debtor towards Operational Creditor.
3. Examination of the period of limitation for the debt claimed by the Operational Creditor.

Analysis:
1. The application was filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 by the Operational Creditor to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, a Private Limited Company. The Operational Creditor claimed a sum of Rs. 1,08,42,275 from the Corporate Debtor.

2. The Operational Creditor contended that the Corporate Debtor withheld payment for goods supplied, leading to the claim. The Operational Creditor raised three invoices for goods delivered, amounting to Rs. 34,98,706. The Corporate Debtor was alleged to have failed to make payments due in October and November 2012, incurring interest liabilities.

3. The issue of limitation arose concerning the debt claimed by the Operational Creditor. The Operational Creditor argued that a balance confirmation obtained on 31.03.2016 validated the claim within the limitation period. However, the undated balance confirmation raised doubts as the signatures did not match, casting suspicion on its authenticity. Reference was made to Section 18 of the Limitation Act, 1963, regarding acknowledgments of debt.

4. The Tribunal examined the acknowledgment of debt and its timing concerning the limitation period. It was noted that the acknowledgment obtained on 31.03.2016, if considered valid, exceeded the 3-year limitation period from the debt due date of 22.11.2012. Citing legal precedents, including a decision by the Hon'ble NCLAT, the Tribunal concluded that the debt claimed by the Operational Creditor was barred by limitation. The petition was dismissed based on the limitation issue, aligning with established legal principles and court decisions.

This detailed analysis of the judgment from the National Company Law Tribunal, Chennai Bench, highlights the legal intricacies involved in the application under the Insolvency & Bankruptcy Code, 2016, the liability determination, and the critical examination of the limitation period for the debt claimed by the Operational Creditor.