Shree Satya Minerals Private Limited vs M/s. Perfect Engineering Products Limited

Per: Hon’ble Shri H.V. Subba Rao, Member (Judicial

This Company petition is filed by Shree Satya Minerals Private Limited (hereinafter called “Petitioner”) seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Perfect Engineering Products Limited (hereinafter called “Corporate Debtor”) by invoking the provisions of Section 8 & 9 of Insolvency and Bankruptcy Code, 2016 (hereinafter called “Code”) read with Rule 6 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. 2. The present Petition is filed before this Adjudicating Authority claiming that the Corporate Debtor failed to make the payment for a Two Hundred and Sixty Two Only) along with an interest @ 18% per annum (Rs 27,36,454.68/-). 3. The Corporate Debtor filed a detailed reply dated 03.01.2020 opposing the above Company Petition for which the Operational Creditor also filed rejoinder dated 09.03.2021 along with certain documents. 4. Heard the argument of Mr. Sandesh R. Shukla, Counsel appearing for the Petitioner and Mr. Ayush Rajani, Professional appearing for the Corporate Debtor and perused the material available on record. 5. Before going into the merits of the matter, it is very important to briefly mention the chequered carreer of the above Company Petition, since this is the third round of litigation. Initially, the Petitioner filed a Petition before the Hon’ble Bombay High Court under Section 434 (a) of the Companies Act, 1956 on 14.07.2015, thereafter with the enforcement of the Insolvency and Bankruptcy Code, 2016 (hereinafter as Code) w.e.f. 01.12.2016 and vide a Notification viz. ‘Transfer of Pending Cases with High Court’ dated 07.12.2016, this Petition got transferred to this Bench of NCLT for further proceedings under provisions of the Code.

Thereafter, the above-mentioned transferred Company Petition was abated and disposed of by the then NCLT, Division Bench comprising of Hon’ble Bhaskar Pantula Mohan, Member (Judicial) and Hon’ble M.K. Shrawat, Member (Judicial) vide its order dated 06.09.2017 with the following observations which are extracted hereunder for ready reference:

As mentioned above, the Corporate Debtor is resisting the admission of the above Company Petition primarily on the ground of Limitation and also on the ground of are pre-existing disputes between the parties.

Let us deal with the plea of limitation raised by the Corporate Debtor. It is the contention of the Corporate Debtor that the claim arises out of the invoices pertaining to the period of 2011-2012 and the present company petition being filed in 2018 is barred by limitation. It is his further contention that the earlier Company Petition filed by the Petitioner was abated for not complying the provisions of IBC after transfer of the above winding up petition from Hon’ble Bombay High Court and therefore the present petition cannot circumvent the law of limitation.

In order to examine the issue of limitation, it is observed that a meeting had taken place between the representatives of the Corporate Debtor and the Operational Creditor on 07.12.2012 in which both parties after negotions resolved the following. The relevant minutes of the meeting is extracted hereunder;

Thereafter, the Operational Creditor got issued legal notice on 06.05.2015 for winding up under section 434 of the Companies Act for which there was no reply on behalf of the Corporate Debtor. Thereafter, the Operational Creditor filed winding up petition before the Hon’ble Bombay High Court in 2015 which was transferred to this Tribunal after establishment of NCLT.

The Operational Creditor had annexed the following email dated 02.02.2015 to the company petition.

It is very clear from the above e-mail that the Corporate Debtor had once again acknowledged the debt on 02.02.2015 and the above Company Petition can be filed within 3 years from 02.02.2015 i.e. on or before 01.02.2018. In addition to the above as rightly contended by the Petitioner the time spent by the Petitioner in prosecuting the winding up petition before the Hon’ble Bombay High Court till its dismissal on 06.09.2017 has to be excluded under Article 14 of the Limitation Act as per the law laid down by the Hon’ble Supreme Court in the case of Seth Nath Singh and Another Versus Baidyabati Sheoraphuli Co-operative Bank Limited and Another in Civil Appeal No. 9198 of 2019.

Apart from the above, this Tribunal while dismissing the early Company Petition granted liberty to the Petitioner to file fresh Petition after issuing demand notice and therefore the question of limitation does not arise in this case. Nothing prevented the corporate debtor from preferring an appeal against the order dated 06.09.2017 in granting liberty to the Operational Creditor to file fresh petition while dismissing the company petition as abated. Accordingly, the above Company Petition being filed on 06.03.2018 is within limitation.

The next issue is with regard to the pre-existence of disputes. In this regard, it is important to observe here that the Operational Creditor has got issue a legal notice before filing winding up petition before the Hon’ble Bombay High Court for which the Corporate Debtor did not choose to even send any reply. Even otherwise, the Corporate Debtor having admitted the liability through the minutes of meeting dated 07.12.2012 as well as email dated 02.02.2015 is estopped from raising the issue of quality of goods and thus this bench is of the considered opinion that the above plea of pre-existence of disputes raised by the Corporate Debtor is a palpable defence that does not require any further investigation and is liable to be rejected.

For the aforesaid reasons, this bench is of the opinion that the above company petition is liable to be admitted and accordingly, the above Company Petition is admitted by passing the following;