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Judgment
Anant Bijay Singh;
The present Appeal under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 (for short IBC) has been filed by the Appellant being aggrieved and dissatisfied by the order dated 19.01.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Guwahati Bench, Guwahati) in C.P. (IB) No. 26/GB/2019, whereby and whereunder the Petition filed by the Appellant under Section 9 of the IBC was rejected holding that the Petition is time barred.
The facts giving rise to this Appeal are as follows:
i) The Appellant being an Operational Creditor, filed a Petition under Section 9 of IBC claiming for a sum of Rs. 1,95,28,552/- has been due on account of operational debt from the Corporate Debtor/Respondent in respect of work done by the Operational Creditor in regard to fabrication and erection of steel structure at the plant of the Corporate Debtor situated in Meghalaya.
ii) Further case is that pursuant to two work orders dated 13.08.2010 and
20.11.2010 placed by the Corporate Debtor upon the operational creditor, the operational creditor duly completed the work of fabrication and erection of steel structure at its plant in Meghalaya satisfactorily for which completion certificate was issued by the corporate debtor to the operational creditor on 15.02.2013. The Corporate Debtor never disputed the quality of the work done by the operational creditor at their plant in Meghalaya. The said work orders further stipulate that the work was to be completed within 18 months from the date of receipt of the work order.
iii) Pursuant to the work done in respect of aforesaid work orders, the operational creditor raised several invoices in favour of the corporate debtor in respect of which amount remain pending for 81 invoices. As per the work orders 90% was to be paid on progressive bill and 10% was to be kept as retention money which was to be paid by the corporate debtor after 90 days from commissioning of the plant. In respect of work done the Appellant as operational creditor raised several invoices form 02.11.2010 till 10.12.2012 in respect of which amount remain pending for 81 invoices. All the invoices were received by the corporate debtor without any demur or protest.
iv) Further case is that the Respondent by way of various emails issued to the Appellant has unequivocally admitted the sum due from them to the Appellant for the work done in respect of the two work orders. The Appellant as Operational creditor has made various demand for payment of the sum due from 2013 till March 2018. The demand notice issued by the Appellant to the Corporate Debtor to which there was no reply by the corporate debtor even after receipt of the same by putting its seal, stamp and signature. Thereafter, the Appellant moved a Petition under Section 9 of the IBC before the Adjudicating Authority and after hearing the parties the Adjudicating Authority passed the order impugned. Hence this Appeal.
Submissions on behalf of the Appellant
The Ld. Counsel for the Appellant during the course of argument and in his memo of Appeal along with written submissions submitted that the Company Petition was dismissed by the Adjudicating Authority only on the ground that the invoices are beyond three years from the date of filing of the company petition. The Adjudicating Authority while passing the impugned order failed to take into consideration that the order dated 25.10.2019 passed by the Adjudicating Authority whereby the Respondent were directed to produce the record, in spite of appeal bearing Company Appeal (AT) (Insolvency) No. 1330 of 2019 being preferred by the Respondent from such order dated 25.10.2019 before this Tribunal and this Tribunal vide order dated 25.11.2019 passed the following orders:
“As we find that the application under Section 9 of the ‘I&B Code’ filed against the Appellant - ‘M/s. Amrit Cement Ltd.’ is still pending before the Adjudicating Authority (National Company Law Tribunal) Guwahati Bench, Guwahati, merely because certain record has been called for by the Adjudicating Authority, we are not inclined to interfere with the impugned order dated 25th October, 2019. Whatever the arguments as raised on behalf of the learned counsel for the Appellant may be raised before the Adjudicating Authority before it passes the final order under Section 9 of the I&B Code and thereafter, if there is an aggrieved party, that may move before this Appellate Tribunal.
The appeal stands disposed of with aforesaid observations.”
It is further submitted that the Respondent had failed to comply with the directions of the Adjudicating Authority dated 25.10.2019, the Appellant was impelled to file an execution application and a contempt application being I.A. No. 11 of 2020 and I.A. No. 12 of 2020 respectively. At the time of hearing the Respondent agreed to comply with the directions with respect of production of documents, on the basis of which, time was granted to the Respondent till 25.03.2020. Thereafter, contempt application filed by the Appellant was dismissed on 08.02.2021 without granting any opportunity of being heard to the Appellant on the ground that the main company petition had already been dismissed on 19.01.2021.
It is further submitted that the I.A. No. 11 of 2020 and I.A. No. 12 of 2020 were taken up on 09.12.2020 by the newly constituted Bench and were reserved for passing orders. Thereafter, there is no order passed by the newly constituted Bench, which will show that the main company petition was ever heard. Surprisingly on the next date when the matter suddenly appeared in the list of 19.01.2021 on virtual mode it was found that as 19.01.2021 was not the date fixed earlier as per the order of 09.12.2020 and the new Bench suddenly dismissed the company petition without giving any opportunity of hearing to the Appellant and also without disposing of the earlier two interlocutory applications which was fixed for passing orders, which is a gross violation of the principles of Natural Justice.
It is further submitted that while passing the impugned order, the Adjudicating Authority relying the judgment dated 14.08.2020 passed by the Hon’ble Supreme Court rendered in “Civil Appeal No. 6347 of 2019 in the case of Babulal Vardharji Gurjar Vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr.” held that if there is any default above three years from the date of filing of the company petition is barred by limitation. That there is no denial to such proposition, however, the judgment goes on to say if there is any acknowledgement either in the books of accounts or in any financial statements by the Corporate Debtor of the dues of the Operational Creditor, then such acknowledgement has given fresh cause of action ever time to the Creditor to approach the Tribunal under the provisions of the IBC. Such interpretation of the judgment was ignored while passing the impugned order. Th recent judgment of the Hon’ble Supreme Court in the case of “Dena Bank Vs. C. Shivakumar Reddy and Anr. in Civil Appeal No. 1650 of 2020” has made it clear that in case in any of the financial statements of the Corporate Debtor gives fresh period of limitation every time to the Creditor who approaches the Tribunal under the Code under Section 7 or 9 of the IBC.
It is further submitted that in view of the fact that the company petition was never heard on merits coupled with the fact that there is no proof that the Respondent has produced any of the documents. Based on these submissions the impugned order is fit to be set aside and the matter be remanded to the Adjudicating Authority for fresh hearing upon consideration of the documents which the Respondent has been directed to produce pursuant to the orders dated 25.10.2019 and 25.11.2019.
Submissions on behalf of the Respondent
The Ld. Sr. Counsel for the Respondent during the course of argument and in his reply along with written submissions submitted that the Adjudicating Authority did not violate the principles of natural justice, equity and fair play as the Adjudicating Authority passed by the impugned order pursuant to acknowledging and analysing all the document filed and submissions made by the parties. The Appellant has allegedly sought that a direction should be passed against the Respondent to comply with the orders dated 25.10.2019 and 27.02.2020 passed by the Adjudicating Authority, the Adjudicating Authority after verifying the financial documents to determine whether the claim is barred by limitation. The Appellant has falsely alleged that the Respondent did not comply with the order dated 25.10.2019 passed by the Adjudicating Authority. The Respondent while duly abiding by the said order filed all the requisite financial documents which is evident with receipt dated 03.12.2020 annexed at Annexure-C of the reply affidavit. The alleged debt pertains to transactions between 02.11.2010 to 10.12.2012 and last invoice was raised by the Appellant on 10.12.2012. The same has been admitted by the Appellant and also recorded in the impugned order holding that the company petition filed by the Appellant on 26.06.2018 i.e. after a lapse of three years is barred under limitation.
It is further submitted that the documents referred to and filed by the Appellant along with company petition are sufficient to prove that the alleged claims and dues raised by the Appellant are time barred. The Appellant had issued Demand Notice dated 23.03.2018 demanding the payment of INR 1,98,95,546 allegedly due against 78 invoices. The Respondent issued a reply dated 04.04.2018, wherein the Respondent pointed out that the 78 invoices ranged from 02.11.2010 to December, 2012, while the last payment made by the Respondent to the Appellant was on 11.02.2013. It was also stated that the alleged debt being claimed by the Appellant was hopelessly time barred and thus not recoverable. It was also mentioned that the Appellant had deliberately violated the terms and conditions of the work orders and did not completely fulfil their obligations under the work orders, by not providing adequate manpower for the project and not finishing the work, despite repeated requests by the Appellant. Consequently, the Respondent was constrained to engage third-party contractors at an escalated price to finish the work.
It is further submitted that the Appellant has not approached this Tribunal with clean hands and has suppressed material facts and documents, therefore, it is guilty of misleading this Tribunal. The Appellant has made blatantly incorrect and false accusations against the Respondent. The Appellant has falsely averred that vide emails dated 14.10.2013, 06.11.2013, 19.11.2013 and 30.07.203 and a letter dated 27.09.2013 (Annexure-A of the Rejoinder), the Respondent had unequivocally admitted the sum due to the Appellant and has promised to release the payment due for a sum of INR 1,02,78,185 to the Appellant. The Respondent has failed to even place these emails on record (except email dated 27.09.2013 filed with the Rejoinder). That upon bare perusal of the said emails and letters, it is evident that the Respondent has not made any admission or acknowledgment as falsely averred by the Appellant, in any manner, whatsoever.
It is further submitted that the Appellant has repeatedly submitted that in the balance sheets the Respondent has acknowledged alleged debts due to the Appellant. In this regard, the Appellant should be held liable for misrepresentation as nowhere in the balance sheets, the Respondent has admitted to any debt owed to the Appellant. The Appellant has wrongly submitted that it was not provided with an opportunity to make any submissions on merit on I.A. No. 11 and 12 of 2020 on the scheduled date of hearing i.e. 09.12.2018. The Appellant was duly heard by the Adjudicating Authority and also rightly recorded in the impugned order that the parties were heard. The Appellant failed to apprise this Tribunal that as per work orders, the date of default is 01.07.2011 i.e. after three months of the past payment due on 30.06.2011, this fact has also been recorded by the Adjudicating Authority in the impugned order. Based on these submissions, the Adjudicating Authority has rightly passed the impugned order, therefore, there is no merit in the present Appeal, the Appeal is fit to be dismissed with costs as the same is not maintainable both on facts and in law.
After hearing the parties and going through the pleadings made on behalf of the parties, we observe that the reply affidavit filed by the Respondent wherein letter dated 04.04.2018 (Annexure-B at page 69 of the Reply) issued by the Respondent, it has been categorically stated that at that point of time it was constrained to issue an email communication to you dated 22.01.2012 asking to increase your man power strength and for completing the various job works as required by you to be completed within a specified period of time and further disputed that there is an unpaid amount of Rs. 1,98,95,546/- as reflected in the 78 number of invoices attached with the impugned notice as dealt with herein, all the alleged bills as raised by you started from 02.11.2010 ending 10.12.2012 and the payments as received by you were lastly on 11.02.2013 and so the alleged bills as raised by you were strictly barred by the laws of limitation and thus you are not entitled to any payment as allegedly claimed by the Appellant. Further, we also observe that the Appellant in his rejoinder stated that the Appellant as per the agreed terms, completed their works and the Respondent was constrained to engage third party contractor for execution of the balance work which was otherwise within the scope of work of the Appellant.
Taking all the facts aforenoted, we are of the view that there is dispute between the parties prior to filing Section 9 application regarding work in question and also invoices raised by the Appellant between 02.11.2010 to 10.12.2012. Therefore, we do not find any merit in the instant Appeal, the impugned order dated 19.01.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Guwahati Bench, Guwahati) in C.P. (IB) No. 26/GB/2019 is hereby affirmed. Accordingly, the instant Appeal is hereby dismissed. No costs.
Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the Adjudicating Authority (National Company Law Tribunal, Guwahati Bench, Guwahati), forthwith.