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TMI Blog2019 (12) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor is a private company limited by shares and incorporated on 01.07.2005 under the Companies Act, 1956, with the Registrar of Companies (RoC), Maharashtra, Mumbai. Its CIN is U51420MH2005PTC154412. Its registered office is at No. 3/A, RK Wadi, 1st Parsiwada Lane, Near Alankar Talkies, Mumbai, Maharashtra 400 004. Therefore, this Bench has jurisdiction to deal with this petition. 3. The present petition was filed on 08.05.2019 before this Adjudicating Authority on the ground that the Corporate Debtor failed to make payment of a sum of Rs. 25,42,328.00 (Rupees twenty-five lakh forty-two thousand three hundred and twenty-eight only) as principal and Rs. 30,83,014.00 (Rupees thirty lakh eighty-three thousand and fourteen only) as interest as on 13.02.2012, which is the date of default. 4. The case of the Operational Creditor is as follows: - (a) A tender notice was issued on 17.11.2011 by the Operational Creditor for purchasing stainless steel tubes for use in its sugarcane factory. Subsequent to the application received from the Corporate Debtor and discussions on technical specifications and negotiations held on 31.01.2012 in the Board Meeting of the Operational Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor would be forced to scrap the material and debit the amount to the account of the Operational Creditor. This necessitated the present petition. 6. The quotation given by the Corporate Debtor has been placed on record as Exhibit '8' at pp.25-26. The LoI dated 15.02.2012 placed on record at pp.27-28. The extension LoI dated 28.02.2012 has been placed at pp.29-30. The total debt due and payable to the Operational Creditor is Rs. 56,25,342.00 (Rupees fifty-six lakh twenty-five thousand three hundred and forty-two only), as mentioned at p.31 of the Petition. 7. The Operational Creditor had served a Demand Notice in Form 3 dated 23.11.2018 to the Corporate Debtor (Exhibit '10', pp.32-36) in terms of section 8 of the IBC. The Corporate Debtor has submitted a reply dated 12.12.2018 to the said Demand Notice (pp.47-55). 8. In the said reply dated 12.12.2018, the Corporate Debtor has stated inter alia that the material placed in terms of the Purchase Orders of the Operational Creditor had been made ready and that it was the duty of the Operational Creditor to take inspection and delivery of the material. The Corporate Debtor had requested for enhancement of the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spection of the same (para 3 at page 4 of the Reply); (b) While it is true that the Corporate Debtor had requested for enhancement in the rate of material to be supplied from Rs. 184/-per kg to Rs. 195/- per kg in view of the delay in lifting the contracted material by the Operational Creditor, it was also made clear over telephone that the Corporate Debtor was ready to supply the material at the rate originally agreed, i.e., Rs. 184/- per kg (para 8 at page 4-5 of the Reply); (c) The Corporate Debtor was shocked by the letter dated 04.06.2012 from the Operational Creditor cancelling the purchase order and asking for refund of the advance amount of Rs. 25,42,328/-. The Operational Creditor did not provide any reason for the cancellation, and also the cancellation was made after the material was ready (para 9 at page 5 of the Reply); (d) The material to be supplied was specifically cut to the dimensions provided by the Operational Creditor and therefore could not be sold to any other customer. The advance amount of Rs. 25,42,328/- was liable to be adjusted against the damages suffered by the Corporate Debtor (para 13 at page 6-7 of the Reply); (e) The total amount due and pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.12.2018 and in the reply to the Petition dated 03.06.2019. If the material was custom-made, then it could not have been diverted to any other customer. If it was, then it could not have been sold as scrap. 20. So, the contradictory stands taken by the Corporate Debtor is not tenable and therefore deserves to be rejected. Refund of advance amounts paid 21. Section 5(21) of the IBC defines the term "Operational Debt" as follows:- "Operational debt" means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority." 22. Therefore, the claim has to be in connection with the provision of goods or services including employment, or a debt in respect of the payment of dues arising under any law for the time being in force. In the present case, payment of advance by the Operational Creditor would not satisfy the definition of "Operational Debt" under the IBC. 23. In Tata Chemicals Limited Vs. Raj Process Equipments and systems Private Limited (CP No. 21/2018, order delivered on 30.11.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed in letter and spirit. The date of coming into force of the IBC Code does not and cannot form a trigger point of limitation for applications filed under the Code. Equally, since "applications" are petitions which are filed under the Code, it is Article 137 of the Limitation Act which will apply to such applications."
31. That being the case, since the date of default even according to the Operational Creditor is 22.09.2014, and applying the principles laid down by the Hon'ble Supreme Court in B.K. Educational Services Private Limited and Sagar Sharma judgments, the present petition under the IBC is barred by limitation.
32. For the reasons stated above, the application fails the twin tests of merit and limitation and therefore, the same is rejected.
33. We make it clear that any observations made in this order should not be construed as expressing opinion on merits. The right of the petitioner before any other judicial forum shall not be prejudiced on grounds of dismissal of the present petition by this Adjudicating Authority.
34. Let a copy of this order be communicated to the parties in terms of the provisions of section 9(5)(ii) of the IBC. X X X X Extracts X X X X X X X X Extracts X X X X
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