A.K.C. Infrastructure Pvt. Ltd vs Amrit Cements

[Arising out of 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]

IN THE MATTER OF: A.K.C. Infrastructure Pvt. Ltd. Having its registered office at KP2/134, Chaliyam, District-Calicut, Kerala. ...... Appellant. (Operational Creditor)

Versus

Amrit Cement Limited, Having its registered office at opposite to Horse Shoe building, lower Lachumerie, Shillong, Meghalaya. ....... Respondent. (Corporate Debtor)

Present: For Appellant: Mr. Arik Banerjee, Mr. Shashwat Anand, Mr. Shashwat Parihar, Advocates. CA Arun Gupta. For Respondent:- Mr. Arvind Nayar, Sr. Advocate with Ms. Vanita Bhargava, Mr. Vivek Jhunjhunwala, Ms. Wamika Trehan, Ms. Maithili Moondra, Advocates.

JUDGMENT

(25th November, 2022)

Justice 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 2

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.

2. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 3

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

3. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 4

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."

4. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 5

Appellant on the ground that the main company petition had already been

dismissed on 19.01.2021.

5. 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.

6. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 6

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.

7. 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

8. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 7

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.

9. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 8

Appellant. Consequently, the Respondent was constrained to engage third-party

contractors at an escalated price to finish the work.

10. 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.

11. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 9

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.

12. 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

Company Appeal (AT) (Insolvency) No. 246 of 2021 10

was constrained to engage third party contractor for execution of the balance

work which was otherwise within the scope of work of the Appellant.

13. 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.

14. 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.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical)

New Delhi 25th November, 2022 R. Nath.

Company Appeal (AT) (Insolvency) No. 246 of 2021