TMI Blog2022 (1) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as due and payable by the Corporate Debtor in this application is barred by limitation. Whether the Operational Creditor has made out a case for ordering initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor? - HELD THAT:- It is trite to say that establishment of legally enforceable debt and default in payment of the said debt by the corporate debtor is the sine qua non, for setting the corporate insolvency resolution process in motion against the corporate debtor. The applicant in this case has convincingly established the same. Therefore, the petition deserves to be allowed and Corporate Insolvency Resolution Process against the respondent corporate debtor shall be ordered. Application admitted - moratorium declared. - CP (IB) No. 679/9/HDB/2019 - - - Dated:- 30-12-2021 - Dr. Venkata Ramakrishna Badrinath Nandula, Member (J) And Veera Brahma Rao Arekapudi, Member (T) For the Appellant : Mayur Mundra, Advocate For the Respondents : S. Ravi, Senior Advocate for Shireen Sethina Baria and B. Saroj, Advocates ORDER This is an application filed under section 9 of Insolvency and Bankruptcy Code, 2016, read with Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Operational Creditor pertains to NEXO INDUSTRIES LTD. Thus, there suppression of facts. Excise duty was exempted in respect of three Purchase Orders (POs) dated 09.07.2015, 09.07.2015 and 04.11.2015. Operational Creditor has filed invoices corresponding to those POs, but failed to produce POs. It was deliberate attempt to extract money (quantum of excise duty). Claim is barred by limitation. Petition is filed three years beyond the Invoices related to years 2015-16. The amount claimed of ₹ 25,71,223/- consists of: The amount of ₹ 22,35,961/- is the amount of excise duty, which is exempted, which was wrongly paid. Thus, the Operational Creditor has to claim refund from the Tax authorities. Amount of ₹ 01,86,261/- is towards short supply of materials, which is not payable to Operational Creditor. Balance of ₹ 01,49,001/- has been paid to the Operational Creditor on 23.10.2019. 6. The Operational Creditor has averred in its Rejoinder as following: The issue of illegible invoice has been resolved. Nexo Industries Ltd. (earlier name) and Nexo Industries Pvt. Ltd. (existing name) are one and the same having CIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, limitation, which is being 3 years, commencing in the year 2015 and ended in November 2018 and by February 2019. However, Form-3 Notice was sent on 01.07.2019, long after the expiry of period of limitation. On this ground alone the petition is liable to be dismissed. In support of this contention the Corporate Debtor relied on decision of the Hon'ble Apex Court in the case of Sesh Nath Singh and others Vs. Abaidyabati Sheoraphuli Cooperative Bank Ld. others, MANU/SC/0205/2021, wherein it was held that, 48. The insolvency Committee of the Ministry of Corporate Affairs, Government of India, in a report published in March 2018, stated that the intent of the IBC could not have been to give a new lease of life to debts which were already time barred. Thereafter Section 238A was incorporated in the IBC by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (Act 26 of 2018), with effect from 6th June 2018. Section 238A provides as follows:- 238A. The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted ledger account of the Corporate Debtor filed by the Operational Creditor in respect of three Purchase Orders referred to above. As rightly contended by the learned counsel for the Operational Creditor the said ledger account discloses that the Corporate Debtor has been making part-payments for the supplies made under the aforementioned three Purchase Orders until 30.03.2017. By virtue of the said payment the period of limitation prescribed stands extended by 3 more years from the date when the last payment was made. The prescribed period of limitation for filing the Application for recovery of amount due being 3 years which period is to be reckoned from 30.03.2017 the argument that the present application is barred by limitation becomes wholly unsustainable and unacceptable. That apart, it is to be noted that soon after filing the present application, the Corporate Debtor made payment of ₹ 1.49 lacs on 23.10.2019, as is evident from the counter filed by the Corporate Debtor. This payment undoubtedly amounts to acknowledgment of liability by the corporate debtor herein. Therefore, viewed from any angle the sum claimed as due and payable by the Corporate Debtor is well wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of ₹ 22,35,961/- towards excise duty does not even arise. 15. In light of these rival contentions, we have carefully examined the record filed before us in respect of exemption from payment of excise duty. It cannot be denied that the Corporate Debtor has been granted exemption from payment of excise duty by Rajasthan Rajya Vidyut Prasaran Nigam Limited for the supplies meant for its construction works at the places referred to and covered by the purchase orders referred supra, and the said exemption applies to the principal contractor the corporate debtor herein as well as to the vendors including the Operational Creditor herein effective from 27.05.2015. Thus, undoubtedly the above exemption from payment of excise duty has been granted prior to issuance of all the three Purchase Orders referred to supra. 16. So much so what is required to be seen is whether the corporate debtor has submitted the exemption certificate to the operational creditor before the Operational Creditor had dispatched the material as mandated under clause 4.0 of the purchase order. Here it is necessary to refer to clause 2.0 of the Purchase Order which relates to delivery schedule. Clause 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that as it may, even in the Written Submissions filed by the Corporate Debtor, it has been merely stated that the same (EXEC) was provided to the Operational Creditor well before placing the relevant Purchase Order. and the corporate debtor failed to state how and when the same was provided/submitted to the applicant. It is pertinent to note that no correspondence evidencing submission of EDEC prior to the despatch of material by the applicant has been filed by the corporate debtor. When the Operational Creditor had come out with specific date on which it has been supplied with the EDEC by the corporate debtor and also filed Office Memorandum from the Corporate Debtor which is not disputed, it is for the Corporate Debtor to establish its plea of complying clause 4.0 of the purchase order by producing acceptable record/material. However, as already noticed, except orally contending that Excise Duty Exemption Certificates (EDECs) was provided/submitted prior to despatch of the material no document in support of the said contention has been filed by Corporate Debtor. So much so, the belated plea of the corporate debtor that it had complied Clause 4.0 of the Purchase Order as suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate Debtor. (C) That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (D) Notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period. (E) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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