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2021 (3) TMI 767 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Application rejected on the ground of ‘Pre-Existing Dispute’ and ‘Claims being time barred’ - HELD THAT:- The law with respect to ‘date of default’ and ‘limitation’ under ‘IBC’ has been clearly laid down by the Hon’ble Supreme Court in a catena of Judgements. In VASHDEO R BHOJWANI VERSUS ABHYUDAYA CO-OPERATIVE BANK LTD AND ANR. [2019 (9) TMI 711 - SUPREME COURT], the Hon’ble Supreme Court referring to B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT] held that when the recovery certificate dated 24-12- 2001 was issued, this certificate injured effectively and completely the appellant's rights as a result of which limitation would have begun ticking. In the aforenoted Judgement it is clearly observed that the period of limitation for an Application seeking initiation of CIRP under Section 7 of the Code is governed by Article 137 of the Limitation Act and is, therefore three years from the date when the ‘Right to Apply’ accrues. In the instant case, the material on record and the admitted invoices, evidence that the first unpaid debt is dated 12.03.2011 - It is significant to note that there is gap between 14.06.2012 and 02.04.2015 of almost three years. Be that as it may, the date of default is of relevance here. As the Code mandates, Section 9 Application is filed after the issuance of Demand Notice under Section 8(1) which contains the details of unpaid Operational Debt. It is also interesting to note that Part IV of the Application under Section 9 mentions the ‘date of default’ as ‘June 30, 2017’; for an amount of ₹ 2,39,85,521.35/-. It is seen from the record that the date of first default is March 2011 and the cumulative amount claimed is ₹ 2,39,85,521.35/-. Section 9 Application emanates from the Demand Notice under Section 8(1). Both have to be read conjointly and the date of default cannot be construed to be different merely because it is differently mentioned as ‘2011’ in Section 8 Notice and ‘2017’ in Application under Section 9 - the argument of the Learned Counsel for the ‘Operational Creditor’ that the period should be confined only from 2015 to 2017 cannot be sustained. The Tribunal cannot confine to one or other invoice if the Applicant has relied on all the invoices to arrive at the amount of ₹ 2,39,85,521.35/- in the Demand Notice under Section 8. We are of the view that the Tribunal does not have Jurisdiction in these Insolvency Proceedings to cut-short the invoices which would cause recurring dates of cause of action as it is not a suit for recovery. In the present case, the ‘Operational Creditor’ failed to bring on record any acknowledgement in writing by the ‘Corporate Debtor’ or its representative within three years of the date of the first default - the Application filed under Section 9 is barred by limitation. Pre-existing dispute between the parties - HELD THAT:- In the instant case, Learned Counsel appearing for the ‘Corporate Debtor’ drew our attention to pages 626 to 630 of Volume III, which is a part of the Reply filed before the Adjudicating Authority wherein the email correspondence between the parties dated 21.07.2012, 18.12.2013, 31.07.2015, 18.08.2015 is reproduced. It is seen from this correspondence that it pertains to the period between 2012 to 2015 and establish that they relate to regular day-to-day issues viz. ‘projector having been switched off’, ‘shifting of the computers systems’, ‘the costs charged for the shifting’, issue regarding ‘DG set’ etc. It is noted that the last ‘Complaint’ about the equipment or services rendered is dated 19.08.2015. It is pertinent to mention that nowhere in this correspondence any issue with respect to training or payment of ₹ 25/- Lakhs or any other breach of the clauses of the Master Licence Agreement has been raised. The material on record and the documentary evidence filed does not establish that there was any dispute prior to issuance of the Section 8 Demand Notice or that there was any assertion of facts supported by any evidence to establish existence of a dispute. The Demand Notice under Section 8(1) dated 08.08.2017 and the Reply which was filed one month later for the very first time raises these issues - though the Application is barred by limitation there is no ‘Pre-Existing Dispute’ between the parties. Appeal dismissed.
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