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Judgment
Per P.S.N. PRASAD, MEMBER (JUDICIAL)
This is an application filed by the Applicant, M/s Dewpoint Services Consultants LLP, through its Authorized Representative Mr. Pramod Dhir, seeking to initiate Corporate Insolvency Resolution Process (“CIRP”) under Section 9 of the Insolvency and Bankruptcy Code 2016 (“the Code”) against the Respondent, Cloud 9 Projects Pvt. Ltd. for the alleged default on the part of the Respondent in clearing the debt of Rs. 2,56,134/- (Rupees Two Lakh Fifty-Six Thousand One Hundred Thirty-Four Only) Principal Amount being Rs. 1,54,000/- as alleged by the applicant, towards the Services Provided by the Applicant. The details of transactions leading to the filing of this application as averred by the Applicant are as follows:
i. The applicant stated that the Respondent through their Directors approached the Applicant for exclusive designing of the plan for Heating and Ventilation and Venting Air Conditioning (HVAC) Consulting Services for their Projects ‘Lotus Peak’ and 'Lotus Espacia' in the year 2014. That the Total fees for the services provided by the Applicant was decided to be Rs. 3,85,000/-. The Applicant further submitted that as the Work progressed, timely payments were being made by the Respondent in accordance to the installments agreed in the work order.
That the Respondent made 60% payments as per Schedule 2 of the Work Order towards the bills by the applicant. That the last payment of Rs. 1,18,226/- was received by the applicant on 24.06.2015 and the last demand for the remaining payment was raised on 21.04.2016.
The Applicant stated that the bills issued were of the amount of Rs. 3,85,000/- out of which the applicant has received a sum of Rs. 2,31,000/- and the remaining principal amount of Rs. 1,54,000/- is still pending. It is submitted by the applicant that the Respondent after acknowledging the emails sent by the applicant never expressed any concern or raised any dispute regarding the non-delivery or any dissatisfaction towards the services provided.
That the applicant sent Demand Notice under section 8 of IBC, 2016 dated 23.07.2019 under Form 3 and 4 under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 to the Respondent.
That on 14.08.2019 the applicant received the reply to the demand notice dated 07.08.2019 by Respondent. The Respondent in its reply to the notice stated that the amount payable as per alleged reconciliation statement is Rs.77,000/- which does not qualify as minimum default amount to initiate CIR Process along with that stated that the applicant provided unsatisfactory, negligent and inferior services.
Consequent to the notice issued by the Tribunal, the Respondent filed its reply affidavit stating that:
a. The application has been filed beyond the period of Three years when the purported cause of action arose. The Respondent further submitted that if the debt as claimed by the petitioner, wholly or partly is barred by Limitation then the same cannot be the basis for invoking the provisions of I&B Code, 2016.
b. The Respondent submitted that as the amount claimed cannot be categorized as Operational Debt, the Applicant cannot claim itself to be an "Operational Creditor" within the meaning of Section 5(20) of the Code, as the amount which is purportedly claimed to be in default does not arise in relation to any amount payable towards supply of goods, or rendering services, or in connection with the employment, or in relation to any statutory dues as prescribed and mandated under Section 5(21) of the Code.
The Learned counsel for the operational Creditor while advancing the arguments submitted that the issuance of Invoice is not a mandatory requisite under section 9 of the I&B Code, 2016 and the same has been reiterated by the NCLAT in the case of Neeraj Jain v. Cloudwalker Streaming Technologies Private Limited C.P.(IB) No. 260/BB/2019 wherein the NCLAT stated that FORM-5 in PART-V of the Regulations mandated the relevant document under which the debt has become due must be annexed. The Counsel further submitted that the last demand of Rs. 88,165/- was raised on 21.04.2016 and the demand notice was sent on 12.02.2019 which falls within the ambit of the Limitation period of three years prescribed in article 137 of the Limitation Act. The Counsel submitted that due to certain discrepancies in the application, the Adjudicating Authority vide order dated 16.07.2019 dismissed the petition with an opportunity to file fresh with the same cause of action.
While advancing the arguments the Learned Counsel for the Corporate Debtor placed reliance on the judgement of Hon’ble Supreme Court in matter of B.K. Educational Services v. Parag Gupta and Associates (2019) 11 SCC 633, wherein the Apex court held that provisions of the limitation Act, 1963 are applicable to petitions filed by the operational creditor under section 9 of the code from the “inception of the code”. It was further held that the right to sue therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the petition, the petition would be barred under Article 137 of the Limitation Act, 1963. The Ld. Counsel further submitted that in the facts of the present case, from the bare perusal of the petition filed by the Operational Creditor, the alleged date of default as per Form 5 Part IV, is 21.04.2016. Therefore, the period of limitation in terms of Article 137 of the Limitation Act for filing a petition under Section 9 started running from the alleged date of default. i.e., 21.04.2016. Therefore, petition if any under Section 9 of the Code, for any alleged default should have been preferred by the Operational Creditor by 21.04.2019, i.e., 3 years from the date of default. i.e., 21" April 2016 (365 day * 3 = 1095 days). That the petition under Section 9 of the Code, was preferred for the first time on 12.03.2019 titled as M/s Dewpoint v. Cloud 9 Projects Private Limited and Others IB-1434/(ND)/2019. However, the same came to be dismissed on 16.07.2019, with a liberty to file fresh petition. It is further submitted by the ld. Counsel for the Corporate Debtor that even with the liberty of Section 14 of the Limitation Act i.e., from 12.04.2019 to 16.04.2019, the Operational Creditor has delayed by 36 days, in filing the present petition, under adjudication.
We have heard the arguments advanced by the Ld. Counsels for both the parties and perused the averments made in the application and reply as well as the documents enclosed. We have also gone through the written submissions filed by both the parties in the matter.
On Perusal of Part- IV of the Application which contains the Particulars of Operational Debt the Date of Default is mentioned as 21.04.2016 the date on which the last demand was raised by the Operational Creditor however, the present application has been filed on 10.10.2019 which is way beyond the period of three years hence, it can be ascertained that the present application has been filed beyond the period of three years from the date of default.
The Hon'ble Supreme Court in Babulal Vardharji Gurjar vs. Veer Gurjar Aluminum Industries Pvt. Ltd. & Anr. Civil Appeal no. 6347 OF 2019 has held that the right to apply under the code accrues on the date when the default occurs and that the date of commencement of the code is not the trigger point for the limitation and if the default had occurred over three years prior to the date of filing of the application, the application would be time-barred.
From the aforesaid decisions, it is clear that the Present application filed under section 9 of IBC, 2016 fails the test of limitation.
For the reasons discussed above, since the debt is time-barred we have no option but to reject the prayer of the Operational Creditor to initiate proceedings under Section 9 of IBC, 2016.
Accordingly, we hereby dismiss the present application.