TMI Blog2021 (3) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... Affairs is 604, Kaushal Point, 4th Floor, Behind Uday Cinema, Ghatkopar (W), Mumbai - 400086 and the same is further reflected in the Annual Report, it is concluded that service of Demand Notice mandated under Section 8 of the IBC to the aforesaid address of the Corporate Debtor is satisfactory and is therefore held sufficient. Whether Application arises out of time barred claims ? - HELD THAT:- The amount became due and payable on 22.09.2016 when only a part payment was made. Section 3(11) defines debt as a liability or Application in respect of a claim which is due from any person and includes Financial Debt and Operational Debt. Section 3(12) defines default as 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 Debtor or the Corporate Debtor as the case may be. In the instant case part or instalment of the amount of debt has become due and payable as on 22.09.2016. It being a running account, considering the manner in which such businesses are conducted and accounts are kept, it would be material to see when the parties concerned treat the debt to be in default . It is pertinent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of Account of the Corporate Debtor regarding the transactions and invoices. This shows an outstanding Debt of ₹ 90,49,843/- due from the Corporate Debtor as on 31.0.2018. This clearly shows the amount due from the Corporate Debtor. 16. This Bench on examination, finds that the Demand Notice dated 10.09.2018 has been duly served through registered post by the Petitioner at 604, Kaushal Point, 4th Floor, Behind Uday Cinema, Ghatkopar (W), Mumbai. A proof of delivery by way of acknowledgement card has been attached by the Petitioner with his Petition. That it is the correct address for delivery of Demand Notice is borne out by the fact this address is mentioned as the Registered address of the Corporate Debtor Company even in their Annual Report of 2018-2019. This Bench, therefore, has no doubt that the Demand Notice was duly served upon the Corporate Debtor and it chose not to contest it. 17. The Petitioner is registered under the MSME Act, 2006. Since the default amount as per the petition is ₹ 90,49,843/- and the Petitioner claimed ₹ 1,77,11,546/- in Demand Notice. The Bench, while not going into the actual calculation of interest, is of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age Nos. 109-115 of the Appeal Paper Book, which contained the copies of the Registered Post, Acknowledgement due sent to the Corporate Debtor and the Directors of the Corporate Debtor Company; he submitted that the notice sent to the Appellant/Mr. Abhinandan Jain was returned to the Operational Creditor with an endorsement closed in the period 2017-2018 . Likewise, the notice sent to Priya Arhant Jain, Mr. Arihant Jain and Mr. Shital Rikhabchand Multha were also returned with an endorsement closed for a period 2017-2018 . Regarding the service of notice on the Corporate Debtor, Learned Counsel for the Appellant argued that the stamp on the acknowledgement card is that of Brahmecha Modi, Charted Accountants who has nothing to do with the Corporate Debtor. 5. With respect to service of notice on Mr. Vipin Champawat Shantilal, Learned Counsel for the Appellant submitted that though the acknowledgement card is signed by him, being an independent Director, he does not occupy any Key Managerial Position and therefore cannot be said to be effective service as provided for under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. 6. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Pvt. Ltd. f. Jetspeed Tradecom Pvt. Ltd. g. Vigorous Tradelink Pvt. Ltd. h. Tanaya Enterprises Pvt. Ltd. i. Vemb Lifestyle Pvt. Ltd. 10. It is submitted that all the email correspondence from Mr. Punit Shivkumar Agarwal was done by Ms. Rashmi Shetye through her email id and vide email dated 03.11.2014, Ms. Rashmi Shetye sought confirmation from the Corporate Debtor of its credit balance with the group companies to the tune of ₹ 34,23,71,004/-. It is argued by the Learned counsel for the Appellant that the said invoices are forged and fabricated; that the Respondent had filed self-serving documents; that no amount was due and payable under the said invoices; that there is a Pre-Existing Dispute between the parties established from the fact that the Corporate Debtor had filed an Application under Section 8 9 of the IBC against Aakash Lifestyle Pvt. Ltd. and Shirin Exports Pvt. Ltd. , which are the companies of Mr. Punit Shivkumar Agarwal before NCLT, Mumbai, vide order dated 14.11.2019 CP(IB) No. 2306/I BP/2019 in Risa International Pvt. Ltd. Vs. Aakash Lifestyle Pvt. Ltd. and order dated 14.11.2019 in CA(IB) No. 2581/I BP/2019 in Risa Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Application under Section 9 of the IBC was raised from ₹ 1,00,000 to 1,00,00,000/- is prospective in nature as laid down by this Tribunal in the case of Madhusudan Tantia Vs. Amit Choraria Anr. Company Appeal (AT) (Insolvency) No. 557 of 2020 dated 12.10.2020. 13. Learned Counsel for the Respondent vehemently denied that there was any Pre-Existing Dispute between the parties and further submitted that the Appellant in contravention of the provisions of the Code, withdrew an amount of ₹ 1,03,30,513/- on 03.09.2020 subsequent to the initiation of the Corporate Insolvency Resolution Process (CIRP) dated 31.08.2020 and thereafter preferred this Appeal on 10.11.2020. Learned Counsel for the Respondent drew our attention to I.A. No. 2065 of 2020 filed by the Resolution Professional (RP in short) under Section 60(5) of the Code seeking direction to the Directors to return the money withdrawn by them. He submitted that this Appeal is preferred subsequent to the filing of the Application by the RP only as an after thought. Assessment 14. At the outset, we address ourselves to the issue whether Demand Notice under Section 8 has been duly served upon the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a dispute of the unpaid operational debt; (c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor; and (d) such other information as may be specified. (e) any other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information, as may be prescribed. (4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional. (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,- (a) the application made under sub-section (2) is complete; (b) there is no repayment of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) no notice of dispute has been re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor by Registered Post, Acknowledgement Due to 604, Kaushal Point, 4th Floor, Behind Uday Cinema, Ghatkopar (W), Mumbai 400086 . Rule 5 provides that the Notice is to be served on the Corporate Debtor at the Registered Address available on the Records/Portal of the MCA. A perusal of the Master Data, evidences that the Registered Address is 604, Kaushal Point, 4th Floor, Behind Uday Cinema, Ghatkopar (W), Mumbai 400086 . In the Master Data, the signatory details of the Directors, is stated as below; Din/PAN Name Begin date End Date Surrender DIN 03157346 Shital Rikhabchand Mutha 10/12/2011 03199953 Abhinandan Jain 19/10/2011 AFFPJ2303D Abhinandan Jain 12/02/2015 03288261 Arihant Jain Suresh 27/05/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the definition of Key Managerial person of the Corporate Debtor. 22. The receipt of notice by the Independent Director further fortifies the case of the Operational Creditor, as he is a Member of the Board of Directors and it can be safely construed that the Board of Directors has knowledge of the same. It is the Board of Directors who takes a call and acts on behalf of the Corporate Debtor and the Independent Director is a part of it. Be that as it may, the Respondent had got issued a Legal Notice dated 20.08.2018 prior to the issuance of the Demand Notice in September 2018, addressed to the Corporate Debtor at the Registered Address. The same has not been denied by the Corporate Debtor. Additionally, a notarized Affidavit of service has been filed with respect to handing over a copy of the Petition to the Office of the Corporate Debtor. 23. Keeping in view the facts of the attendant case, Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and Sections 8 9 of the IBC, the letter issued by the Department of Posts, Government of India alongwith the fact that admittedly the Registered Office of the Corporate Debtor in the Mas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 137 of the Limitation Act which will apply to the facts of this case. 5. Mr Debal Banerjee, learned Senior Counsel, appearing on behalf of the respondents, countered this by stressing, in particular, para 7 of B.K. Educational Services Private Limited (supra) and reiterated the finding of the NCLT that it would be Article 62 of the Limitation Act that would be attracted to the facts of this case. He further argued that, being a commercial Code, a commercial interpretation has to be given so as to make the Code workable. 6. Having heard the learned counsel for both sides, what is apparent is that Article 62 is out of the way on the ground that it would only apply to suits. The present case being an application which is filed under Section 7, would fall only within the residuary Article 137. As rightly pointed out by learned counsel appearing on behalf of the appellant, time, therefore, begins to run on 21.07.2011, as a result of which the application filed under Section 7 would clearly be time-barred. So far as Mr Banerjee s reliance on para 7 of B.K. Educational Services Private Limited (supra), suffice it to say that the Report of the Insolvency Law Committee itself s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2011 being the date of NPA . It remains indisputable that neither any other date of default has been stated in the application nor any suggestion about any acknowledgement has been made. As noticed, even in Part-V of the application, the respondent No. 2 was required to state the particulars of financial debt with documents and evidence on record. In the variety of descriptions which could have been given by the applicant in the said Part V of the application and even in residuary Point No. 8 therein, nothing was at all stated at any place about the so called acknowledgment or any other date of default. (Emphasis Supplied) 28. In the instant case the documentary evidence, that is the ledger and the running account filed evidences that the first invoice dated 27.10.2014 is for an amount of ₹ 17,84,640/-, part payment of which i.e. ₹ 7,06,008/- was received, leaving a balance amount of ₹ 10,78,632/-. The other invoices and the amounts claimed for in Part III, Form V of the Application are detailed as hereunder; a) Invoice no. TEPL/RIL/024/14-15, dated 27.10.2014, for an amount of ₹ 17,84,640/-. [Part Payment of ₹ 07,06,008/- has been receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant to the subject matter of the instant case, in the absence of any communication filed evidencing any Pre-Existing Dispute , prior to the filing of the Section 9 Application. It is pertinent to mention that in their Reply to the Application, filed before the Learned Adjudicating Authority, the Appellant apart from raising a bald denial has not filed any substantive material in support of their contentions. We are of the considered view that ratio laid down by the Hon ble Supreme Court in Mobilox Innovations Private Limited V/s. Kirusa Software Private Limited , (2018) 1 SCC 353 is squarely applicable to the facts of this case. At this juncture, we find it relevant to reproduce the specific paragraphs is detailed as hereunder; 40. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the existence of a dispute or the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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