9911796707
TMI Blog2025 (1) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... tition on 17.02.2020. Submissions made by the Appellant- Suspended Management: 2. The Impugned Order should be set aside because OC's Form-5 was incomplete and defective, warranting the dismissal of the Application under Section 9. The Impugned Order should be set aside under Section 9(5)(b) of the IBC, which mandates rejection of incomplete applications. OC falsely affirmed in an affidavit that it did not receive a Reply to the Demand Notice. 3. The Demand Notice dated 15.01.2020 was posted on 22.01.2020 and received by the CD on 28.01.2020, as confirmed by the postal receipts and tracking report. The CD sent its Reply dated 07.02.2020 via speed post on 08.02.2020 to the same address from which the Demand Notice was sent. The Reply was returned from two of the three addresses with the note "left." The envelopes sent to the remaining addresses, including that of the OC's counsel, Mr. Vijay Shinde's, are presumed delivered, though tracking reports are unavailable on the postal department's website. Although the Notice was posted on 22.01.2020 and delivered on 28.01.2020, the Section 9 Application was prepared on 07.02.2020, before the 10-day statutory period expired. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itially supplied boxes that met the required specifications and quality, for which the CD made payments. However, the quality of the boxes later declined, causing damage to the packed fruits and resulting in financial loss to the CD. The CD repeatedly raised concerns about the inferior quality of boxes with the Company. In 2016, Arvind Gulsia, the Appellant's Managing Director, visited the OC's Mumbai office several times to address the issue. Other representatives of the CD also followed up regularly. During these discussions, the OC admitted to the poor quality of the boxes, apologised, and promised to improve future supplies. To avoid legal issues and based on their long relationship, the OC and CD mutually agreed to a deferred payment schedule for the remaining balance, starting from May 2018 to September 2019, with payments to be made without interest. From 03.05.2018 to 27.02.2019, the CD paid the OC Rs 11,69,948/- (rupees eleven lakhs, sixty-nine thousand, nine hundred and forty eight only) in cash. This amount, which the OC claims is still due, is reflected in the CD's books for FY 2018-2019. However, despite receiving this payment, the OC issued a Notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petition as well as Demand Notice in a tabular chart which is at Page No. 161 of the Appeal Memo. The third date of default mentioned on Page No. 68 in the Form-5 Petition is 18.02.2017, which is mentioned since it is relevant for computation of period of limitation as there was running account between parties and last payment of Rs 1,34,892/- (rupees one lakh, thirty-four thousand, eight hundred and ninety-two only) was made by the CD on 17.02.2017 and, hence, as specified therein, the date was referred to for the purposes of computing period of limitation of 3 years from 18.02.2017 as such payment extends limitation under Sections 18 and 19 of Limitation Act, 1963. With respect to the issue that whether the Petition was filed within limitation or not since, last part payment was made by CD on 17.02.2017 which is not disputed by the CD, the period of limitation once again stood extended for 3 years from 18.02.2017 as per Section 12(1) of the Limitation Act read with Rule 3 of NCLT Rules which provides that in computing limitation period, the day from which such period is to be reckoned stands excluded. Hence, period of 3 years would expire on 17.02.2020 and present Petition a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivery challans and are acknowledged by the CD. 15. The Appellant has made baseless claims and grounds for challenging the Impugned Order, questioning genuineness of the invoices trying to mislead that GST is levied on invoices raised during period of 29.06.2016 to 30.11.2016, while GST regime was introduced on 01.07.2017 as stated in Page No. 29 of Appeal Memo. The same is an entirely false statement being made and an attempt to mislead this Hon'ble Appellate Tribunal is evident from bare perusal of invoices from Page No. 84 to 107 of Appeal Memo wherein VAT, CENVAT is levied and not GST. The CD itself has acknowledged the receipt of goods under the said invoices. GST is claimed while filing Form-5 Petition in the year 2020 when GST regime was implemented and GST Act provided on levy of it on interest charged on the delayed payments as evident from computation of default annexed at Page 161 of Appeal Memo. Even otherwise, the principal amount as well as interest amount in default levied as per terms of invoice being an amount of Rs 11,69,999/- (rupees eleven lakhs, sixty-nine thousand, nine hundred and ninety-nine only) and Rs 8,96,029.76/- (rupees eight lakhs, ninety-six thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned in the Demand Notice and Form-5 Petition, it is noted from the materials on record that a total of 13 invoices, aggregating to a principal debt amount of Rs.11,69,999/- (rupees eleven lakhs, sixty-nine thousand, nine hundred and ninety-nine only) were raised and defaulted upon. The first invoice, dated 26.09.2016, was for Rs.1,12,360/- (rupees one lakh, twelve thousand, three hundred and sixty only). After the 30-day credit period, the payment became due, and default occurred on 26.10.2016. The last invoice, dated 30.11.2016, was for Rs.74,495/- (rupees seventy-four thousand, four hundred and ninety-five only) and became due on 30.12.2016. The Demand Notice (Page 76 of the Appeal Memo) and Form-5 Petition (Page 68) both reference these same default dates for the first and last invoices. Additionally, the details of the due and default dates for all 13 invoices were annexed to the Petition and the Demand Notice in a tabular chart found at Page 161 of the Appeal Memo. The third date of default mentioned on Page 68 of the Form-5 Petition is 18.02.2017. This date is significant for the computation of the limitation period, as there was a running account between the parties, and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered to the corporate debtor vide registered post as the postal receipt and tracking reports are attached at Annexure-l of the petition. The corporate debtor did not reply to the demand notice till date. Therefore, a demand notice was duly served." 24. CD claims that the OC falsely asserted in its affidavit that it did not receive a Reply to the Demand Notice. The CD claims that it duly responded to the Demand Notice, with supporting postal receipts provided as evidence. The tracking reports were unavailable due to the operational challenges during the COVID-19 pandemic. It is claimed that CD replied to the Demand Notice within the statutory period and raised a legitimate dispute regarding the claimed amount. Consequently, the Order violates Section 9(5) of the Insolvency and Bankruptcy Code (IBC), as the application is incomplete and OC has not received the reply to the demand notice and for that reason should be set aside by this Tribunal. Adjudicating Authority has concluded that: "... 10. The first issue for consideration is whether the demand notice in Form-3 dated 15.01.2020 was properly served. The demand notice delivered to the corporate debtor vide registered post as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21-7-2011, 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 11 of B.K. Educational Services (P) Ltd., suffice it to say that the Report of the Insolvency Law Committee itself stated that the intent of the Code could not have been to give a new lease of life to debts which are already time-barred." 6. An application under Section 9 of IBC cannot be said to be a suit and analogy of Hon'ble Supreme Court judgment in Hargovindbhai Dave's case, supra, is fully applicable to the application filed under Section 9 IBC also. Further, also it is well settled by the judgment of the Hon'ble Supreme Court in B.K. Educational Services (P) Ltd. v. Parag Gupta and Associates, (2019) 11 SCC 633 that provision of Section 5 Limitation Act are also fully applicable in Section 7 & 9 IBC applications. Section 5 Limitation Act is not applicable in a suit which is also a clear indication that Application under Section 7 & 9 are not a suit. 7. The Judgments of Hon'ble Supreme Court relied by the Adjudicating Authority regarding bar of Section 69(2) is not attracted in the present case since the application under Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 of Page No. 47 of APB has been gone into. It was claimed by the CD that the quality of boxes was not as per specifications leading to damage of fruits packed in boxes leading to financial loss to the respondent. However, there is no material placed on record to show that the dispute existed between the parties much before the issuance of the Demand Notice. There is no correspondence between the parties to that effect. Further only after the service of Demand Notice and filing of Petition by OC, CD disputed it. Further, on the one hand, the Appellant contends pre-existing dispute, while on other hand, assumes an entirely contradictory position that the entire debt amount was paid by way of cash in instalments during the period of 03.05.2018 to 27.02.2019. Further, the CD claims to have passed entries of cash payments in its ledger annexed at Page No. 158 to 160 of APB while acknowledging debt payable by the CD for principal debt amount of Rs 11,69,948/- (rupees eleven lakhs, sixty-nine thousand, nine hundred and forty-eight only) as on 01.04.2018. These are self-serving accounts of OC. Except for CD's ledger account, with large number of small value cash entries, without producin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
