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2021 (4) TMI 309 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Appeal against the admission of application - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - pre-existing dispute or not - Operational Debt or not - HELD THAT:- As per the General Agency Agreement between the Operational Creditor and the Corporate Debtor, the Corporate Debtor acted as an agent of the former in India and collected various payments due to the Operational Creditor's customers remitted the same to the Operational Creditor. The Operational Creditor has annexed various invoices and debit notes with the Petition as evidence of the claim amount. Since the Corporate Debtor was an agent and service provider of the Operational Creditor, the amounts due under the transactions would fall within the ambit of Operational Debt as defined under Section 5 (21) of the Insolvency and Bankruptcy Code 2016. Time Limitation - HELD THAT:- Section 7 of the I&B Code comes into play on non-payment of "debt" when whole or any part or instalment of the amount of Debt has become due and payable and is not paid by the Corporate Debtor. When the Corporate Debtor acknowledges the liability before the expiration of three years, from that point fresh period of Limitation u/s 18 of the Limitation Act starts. But such acknowledgement must be before the expiration of the prescribed period of Limitation, including the fresh period of Limitation due to acknowledgement of the Debt, from time to time for the institution of proceeding under Section 7 of the Code. The limitation period started after the General Agency Agreement's termination, when demand was raised, and the default was committed by the Corporate Debtor. Therefore, the limitation period is regularly getting extended by implication of Section 18 of the Limitation Act. Thus it is clear that the Debt is not barred by Limitation. Pre-existing dispute or not - HELD THAT:- It is a settled position of law that once the Debt and default in question are proved, and the Corporate Debtor raised no prior dispute, it is mandatory for the Adjudicating Authority in an Application filed under Section 9 of the Code, admit the Petition for Initiation of CIRP. We believe that the Appellant's objection regarding the pre-existing dispute is not sustainable in the above circumstances - the Corporate Debtor owes a debt of more than Rupees One Lac, i.e. above the threshold limit, and it committed default in discharging the same. It also appears that there was no pre-existing dispute. The Corporate Debtor's main contention is that the amounts paid by the Operational Creditor and its financial statements do not match. It is not for the Adjudicating Authority to ascertain, investigate, or fix the exact amount of liability at the admission stage. After the admission of the petition, it is the duty of the Resolution Professional to collate the claims and ascertain the liability. Appeal dismissed.
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