Zambon Company S.P.A vs Vivimed Labs Limited

Per: Manoj Kumar Dubey, Member (Technical)

The present petition is filed on 10.02.2020 under section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC’/Code), r/w. Rule 6 of the I&B (Application to Adjudicating Authority) Rules 2016, by M/s Zambon Company S.P.A (for brevity ‘Operational Creditor/Petitioner’) inter alia seeking to initiate Corporate Insolvency Resolution Process against M/s. Vivimed Labs Limited (hereinafter referred as ‘Corporate Debtor/Respondent) on the ground that the Corporate Debtor has committed a default for a total outstanding amount of Rs. 2,59,21,200/-. (Rupees Two Crores Fifty Nine Lakhs Twenty One Thousand and Two Hundred) along with interest @ 18% the total amount claimed is Rs. 5,39,16,096 (Five Crores Thirty Nine Lakhs Sixteen Thousand and Ninety Six).

Brief facts of the case, which are relevant to the issue in question, and as narrated by the Petitioner are as follows:

The Operational Creditor is a company incorporated under the laws of Italy. It is a fine chemicals company dedicated not only to providing its customers with fast, cost-effective quality custom synthesis services, APIs and intermediates but also to supporting them with extensive process development expertise.

The Corporate Debtor placed orders with the Operational creditor for supply of 6000 Kilograms of Gabapentin USP vide three Purchase Orders bearing Reference Nos. 13000293, 13000294 and 13000295 respectively. Pursuant to these purchase orders, Invoice No. 141300255 dated 13.09.2013 for a sum of US Dollars 363,036/- was raised on the Corporate Debtor by the Operational Creditor. In accordance to the payment terms as under the purchase orders and the invoice, payments were to be made by the corporate debtor within 90 days from the date of the invoice. In Form 5 at Part IV, the total amount of debt of the corporate debtor in US Dollars is 363,036 as per Invoice dated 13.09.2013 and the mentioned date of default is 13.12.2013. The Invoice No. 141300255 dated 13.09.2013 is at Annexure E of the petition.

The dues when converted from US Dollars into Indian Rupees @ Rs. 71.40 per Dollar comes to Rs. 2,59,21,200/- (Rupees Two Crores Fifty Nine Lakhs Twenty One Thousand and Two Hundred only) (Principal amount). The interest @ 18% from 13/12/2013 (being the date which default occurred) to 13/12/2019 against Rs. 2,59,21,200/- (Rupees Two Crores Fifty Nine Lakhs Twenty One Thousand and Two Hundred only) come to Rs. 2,79,94,896/- (Rupees Two Crores Seventy Nine Lakhs Ninety Four Thousand Eight Hundred and Ninety Six). Thus, the total amount due inclusive of interest, when calculated in Indian Rupees totals an amount of Rs. 5,39,16,096/- 096 (Five Crores Thirty Nine Lakhs Sixteen Thousand and Ninety Six).

It is submitted that a series of Email correspondences, being dated 05/08/2016, 08/09/2016, 06/12/2016, 21/12/2016, 10/01/2017 and 11/02/2017 were exchanged between the corporate debtor and the operational creditor and its agent, wherein the aforementioned dues seeks conformity and due acknowledgement by the corporate debtor.

The operational creditor states that the corporate debtor has duly accepted and acknowledged receipt of goods under the Invoice and Purchase orders, and even after expressly acknowledging its liability has failed to make payments towards the aforementioned Invoices even after repeated requests having been made by the operational creditor.

The operational creditor was constrained to issue Demand Notice and as such a Demand Notice under Form-3 was issued by the operational creditor upon corporate debtor on 20/12/2019 and the same was duly served upon the corporate debtor, receipt of which is enclosed. However, payments have not been made even after receipt of Demand Notice by the Corporate Debtor.

Notice in the present C.P. was issued on 19.06.2020. On 29.10.2021, when the matter was listed, respondent submits that they have filed reply vide Diary No. 2855 on 28.10.2021 and nobody attended on behalf of the Petitioner nor any rejoinder has been filed by the petitioner and accordingly, further two weeks’ time was granted to the petitioner to file their rejoinder, if any. However, when the case was listed on 20.12.2021, the rejoinder filed by the respondent is taken on record. On 21.04.2022, the learned counsels are permitted to file written submissions within three weeks. Accordingly, the pleadings are completed and the matter was reserved for orders.

The counsel for the corporate debtor in his objections has stated that the petition is not maintainable, since the limitation under section 18 of the Limitation Act is not met. On perusal of the contents of the email communication clearly shows that the corporate debtor have not acknowledged the purported operational debt as stated by the Operational Creditor in the petition. Further, it is contended that the Operational Creditor has issued Demand Issue much beyond the period of limitation.

The objections to the Petition filed by the Respondent vide diary no.2855 dated 28.10.2021 has been considered in the order dated 29.10.2021. It was mentioned in the rejoinder dated 24.01.2022 to the objections that there was no dispute of outstanding payment between Operational Creditor and the Corporate Debtor.

Heard the learned counsel for the Petitioner and respondent and perused the records available. This Tribunal on 21.04.2022 directed both the Counsels to file written submissions/bullet points dealing but more than two pages in total with proper index and pagination. The above direction was complied and the same is taken on record.

The Primary issue for consideration is whether the limitation for filing Petition under section 9 is met or not. This Tribunal find it relevant to examine the provisions laid down by the IBC and to note down certain principal laid down by the Hon’ble NCLAT in the case of Mohan Lal Goel vs National Skill Development Corporation [2022] 140 taxmann.com 144 (NCLAT-New Delhi) on 23.03.2022 held that the said e-mails didn’t contain any acknowledgement, which could be read as an acknowledgement of accepting debt within the meaning of section 18 of the Limitation Act. The expressions of the email which was reproduced in this judgment, reveals that it does not reflect any specific acknowledgement within the meaning of Section 18 of the Limitation Act, 1963.

It is observed that the amount of default mentioned in Form No.5 is Rs.5,39,16,096/-, and therefore the threshold requirement of Rs.1 lakh at the time of filing Petition is fulfilled. Further, in respect of issue raised regarding the limitation aspect, it is explained that initially the date of default fell on 13.12.2013, and the corporate debtor has acknowledged the debt on 24.10.2016 through email stating that the corporate debtor will make the overdue payment by 3^rd week of November. Later, in the email dated 21.12.2016, it is stated that they were expecting some external funding and will respond positively. Subsequently vide email dated 10.01.2017, it is informed that they were convincing Bankers to release payment of USD 50000 and another 50000 USD by 15^th February. In the application as well as rejoinder, the applicant has also placed reliance on the email dated 11/02/2017. However, it is noticed from the email that it was stated as follows: “I am in hospital for a brief treatment for 4 days, and will be able to respond on Monday”. Thus, there is nothing specific in the email pertaining to this debt. Though the above mentioned email dated 24.10.2016 is specific about effecting the pending overdue payments; the emails dated 21.12.2016 and 10.01.2017 stated about arranging funding from the Bank. Strictly speaking, these latter two emails also do not refer to the debt specifically; but only arrangement of funds. However, the last email dated 11.02.2017 quoted above does not relate to the matter at hand; and it cannot be treated as an acknowledgement of the debt. In view of the facts and circumstances and in light of the Hon’ble NCLAT judgment laid down in “Mohan Lal Goel vs National Skill Development Corporation” (Supra) this Tribunal is of the considered opinion that this email communication cannot be considered as acknowledgement of debt within the meaning of Section 18 of the Limitation Act, 1963. Hence, the initiation of CIRP against the Corporate Debtor does not arise.

Accordingly, this Tribunal is of the considered opinion that this Petition is not a fit case for admission since the petition was filed on 10.02.2020 which beyond the limitation. Therefore, the instant petition CP (IB) No. 158/BB/2020 is hereby dismissed. However, this order shall not preclude the petitioner from pursuing other remedies in accordance with law, if so advised. No order as to costs.