TMI Blog2020 (9) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions made by ISMT Limited cannot therefore, be accepted. Time Limitation - HELD THAT:- The payment by HIM Teknoforge Limited was made conditionally and was subject to acceptance of the outstanding amount payable being only ₹ 7,31,813/-. This condition was not accepted by ISMT Limited which filed an application under Section 9 of the Code for the amount of ₹ 83,12,760.91 with interest. The conditional payment cannot therefore, have the effect of being an acknowledgment of the debt claimed of ₹ 83,12,760.91. Moreover, even if it is presumed to be an acknowledgment of debt, it is beyond the period of three years from the date on which the debt became due and therefore, a fresh period of limitation is not available - plea of the learned senior counsel for HIM Teknoforge Limited that the present petition is not filed within the limitation period is accepted. The application under Section 9 of the Code is therefore, rejected on the ground that it is barred by limitation and alternatively, on the ground that notice of dispute was received by the operational creditor - Application disposed off. - CP (IB) No. 367/Chd/HP/2018 - - - Dated:- 18-5-2020 - Ajay Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3 of Part V relates to particulars of an order of the Court, Tribunal or Arbitral Panel adjudicating on the default, if any (attach a copy of the order). It is stated therein that Spl.Sum Suit No. 152/2002 titled as M/s. Indian Seamless Steels Alloys Ltd. Vs. M/s. HIM Teknoforge decreed of 03.05.2012. 4. In Part III of Form No. 5, no Interim Resolution Professional (IRP) has been proposed. 5. Vide order dated 19.11.2018, notice of the petition was directed to be issued to HIM Teknoforge Limited. The reply was filed by Diary No. 2788 dated 31.05.2019. It is submitted therein that the entire cause of action emanates out of certain invoices issued by a company namely Indian Seamless Steels Alloys Ltd. (Indian Seamless) during the period 19.09.1998 to 14.09.2000 and qua Indian Seamless and the products supplied by them, there were disputes both on account of the quality of the products delivered and on account of the quantum of debt claimed. It is also submitted that the petition is hopelessly barred by time as a period of three years as specified in Article 137 of the Limitation Act, as applicable to proceedings under the Code on the strength of introduction of Section 238 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings under Section 9 of the Code in the name of ISMT Ltd. would not continue till the time the decree has the name of the decree-holder as 'ISMT Ltd.'. 2. The learned counsel for the petitioner states that appropriate application has already been filed for changing the name and sometime be granted. On the contrary, the learned counsel for the respondent argued that application for execution of the decree has been dismissed as withdrawn by order dated 07.11.2019. We grant opportunity to the petitioner to produce the decree in the name of the company which is the petitioner before us. 3. List the matter on 16.01.2020. 8. In the appeal against the above order, the Hon'ble National Company Law Appellate Tribunal in Company Appeal (AT)(Insolvency) No. 343 of 2020 passed order on 27.02.2020 as follows:- 27.02.2020: Having heard learned counsel for the Appellant and being satisfied of the reasons assigned, delay in preferring the appeal is condoned. I. A. No. 908 of 2020 stands disposed of. Learned counsel for the Appellant seeks to withdraw the appeal with liberty to assail the order passed on consideration of the application under Section 9 i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt due from the operational creditor is ₹ 83,12,760.91 and the date is 12.08.2002 to 13.06.2018. We find that a copy of suit for recovery under Order XXXVII of Civil Procedure Code, 1908 (Spl.Summary Suit No. 152/2002) was filed by M/s. Indian Seamless Steels Alloys Ltd. against M/s. HIM Teknoforge Limited and is at Annexure G of the petition. In Para No. 12 thereof, it is stated by the plaintiff that the cause of action for the first has arisen from 1997-98 when the supply of material to the defendants begun and continued between the plaintiffs and defendants and it also arose when legal notice dated 17.08.2001 was sent by the plaintiffs to the defendants and the same was not complied till the date and that the defendant gave a reply on 03.09.2001 denying and disputing the said amount but at the same time requesting for the statement of document, the statement of account was given on 24.07.2001 and 17.08.2001. The prayer therein was for decree for payment of amount of ₹ 83,12,760 alongwith interest @ 24%. 13. Vide order dated 03.05.2012, the 6th Jt. Civil Judge (Senior Division), Pune, held that considering unchallenged version of plaintiff's witness and doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e can be filed by a person who has a claim in respect of the provision of goods and services. The application is based on the operational creditor neither receiving payment from the corporate debtor nor notice of dispute under Section 8(2) of the Code. There is no provision in Section 9 of the Code read with Section 5(20) and Section 5(21) of the Code for an application being moved to the Tribunal on the basis of a decree. The decree may be evidence of non-payment or of default but by itself, a decree cannot give rise to and form the basis of an application under Section 9 of the Code. Section 3(10) of the Code gives the definition of creditor but it is only an operational creditor who has the right to file an application for initiating CIRP in the case of the corporate debtor. The submissions made by ISMT Limited cannot therefore, be accepted and the judgment dated 3.5.2012 supra cannot be treated as conclusive of the compliance of the conditions provided for under Section 9 and other provisions of the Code. The issue whether the decree should be in the name of ISMT Limited is not therefore, relevant for the present proceedings under the Code. 17. The learned senior counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decree or an order of the Civil Court. In view of the judgment of the Hon'ble Supreme Court in B.K. Educational Services Pvt. Ltd. Vs. Parag Gupta and Associates (supra), Article 137 of the Limitation Act is applicable and the application is barred by limitation under this Article. 20. The learned senior counsel for ISMT Limited has pleaded that after a demand notice was issued on 14.06.2018, HIM Teknoforge Limited issued a cheque in favour of Indian Seamless Steels Alloys Ltd. on 26.06.2018 for ₹ 7,31,813 and this act of issuance of cheque towards part payment by the respondent proved the acceptance and acknowledgment of debt by the respondent and hence, the present claim filed by the petitioner is well within limitation. 21. We find that in response to demand notice dated 14.06.2018 under Section 8 of the Code, HIM Teknoforge Limited filed reply dated 26.06.2018 denying and disputing the outstanding and also stating that they disputed the amount of the decree for the reasons of quality and quantity dispute informed from time to time and debit notes were issued in this regard. An outstanding amount of ₹ 7,31,813/- was accepted as payable as per audited bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. The facts of the present case are being examined with regard to the judgment of the Hon'ble Supreme Court (supra). 25. We find in response to the notice to the demand notice dated 14.06.2018 under Section 8 of the Code, HIM Teknoforge Limited furnished reply dated 26.06.2018 (Annexure P of the petition). In Para 7 thereof, the amount of the decree was disputed for the reasons of quality and quantity dispute and stated that ISMT Limited have been informed from time to time and debit notes were issued in this regard and accordingly, the outstanding amount is only ₹ 7,31,813/- as per the audited books of account. In the rejoinder, ISMT Limited has submitted that the corporate debtor canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t out the matter or reasons best known to them. The entitlement to interest was also disputed. 28. In the rejoinder, the plea of ISMT Limited is that the defence taken by the respondent is nothing but an afterthought story. 29. We find that the notice dated 17.08.2001 of Indian Seamless to HIM Teknoforge Limited is at page 74 of the petition. This was replied to by HIM Teknoforge Limited by letter dated 3.9.2001 (Annexure R-6 Colly of the reply) enclosing a copy of the letter dated 9.8.2001 referred to above. The receipt of the replies dated 9.8.2001 and 03.09.2001 has not been disputed by ISMT Limited. Therefore, a notice of dispute was issued by HIM Teknoforge Limited as early as 2001. 30. We may add here that the judgment dated 03.05.2012 in the suit for recovery under Order XXXVII of Civil Procedure Code, 1908 discusses primarily letter dated 20.02.2001 at Exh.160 and states that by perusal of Exh 160, defendant admitted that approximately ₹ 81,00,000 is due to him as per account in April 2001. At Annexure D (Colly) of the petition, there is a letter dated 20.02.2001 on the subject of Outstandings. The letter appears to be sent by the AGM Marketing of Indian Seam ..... 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