Anjali Patil vs J Maheshkumar Petrochemicals Pvt Ltd ...

IN THE MATTER OF: Paradise Consumer Products Ltd. ...Appellant Versus J. Maheshkumar Petrochemichals Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Dhawal Mohan, Advocate. For Respondent : Mr. Vikas Jain, Mr. Aviral Saxena and Ms. Shrawani, Advocates.

WITH

Company Appeal (AT) (Insolvency) No. 219 of 2022

IN THE MATTER OF: Dr. Anjali Patil ...Appellant Versus J. Maheshkumar Petrochemichals Pvt. Ltd. & Anr. ...Respondents

Present: For Appellant : Mr. Dhawal Mohan, Advocate. For Respondents : Mr. Vikas Jain, Mr. Aviral Saxena and Ms. Shrawani, Advocates.

ORDER

(Hybrid Mode)

Per: Justice Rakesh Kumar Jain: (Oral)

08.02.2024 : Comp. App. (AT) (Ins.) No. 901 of 2020

1. This Appeal is directed against the order dated 23.09.2020 passed by

the National Company Law Tribunal, Mumbai Bench - IV, in C.P. (IB) No.

476/MB.IV/2018, by which an application filed by Respondent under Section

9 of the Insolvency and Bankruptcy Code, 2016, (for short `the Code') against the Appellant for the Resolution of an amount of Rs.52,94,356/- (principal)

and Rs.28,43,287.77/- as (interest) has been admitted.

2. Counsel for the Appellant has submitted that the application filed under

Section 9 is `barred by Limitation'. He has referred to the application filed by

the Respondent (CD) on the prescribed form in which the following averments

have been made:

"Date from which debt fell due:

Sr. No. Date of Invoice Particulars of Due Date Invoice

1. 22/07/2014 2105/RJ02941 02/08/2014

2. 28/07/2014 2648/RJ03074 08/08/2014

3. 11/08/2014 3681/RJ03222 22/08/2014

4. 11/08/2014 3682/RJ03223 22/08/2014

5. 11/08/2014 3683/RJ03224 22/08/2014

6. 22/08/2014 4571/RJ03477 02/09/2014

7. 26/08/2014 4858/RJ03563 06/09/2014

8. 28/08/2014 5118/RJ03692 08/09/2014

9. 28/08/2014 5119/RJ03693 08/09/2014

10. 09/09/2014 5934/RJ03934 20/09/2014

"Date from which default occurred:

Sr. No. Date of Invoice Due Date Date of Default

1. 22/07/2014 02/08/2014 01/08/2014

2. 28/07/2014 08/08/2014 07/08/2014

3. 11/08/2014 22/08/2014 21/08/2014

4. 11/08/2014 22/08/2014 21/08/2014

5. 11/08/2014 22/08/2014 21/08/2014

6. 22/08/2014 02/09/2014 01/09/2014

7. 26/08/2014 06/09/2014 05/09/2014

8. 28/08/2014 08/09/2014 07/09/2014

9. 28/08/2014 08/09/2014 07/09/2014

10. 09/09/2014 20/09/2014 19/09/2014

3. It is submitted that the case setup by the CD is in respect of 10 invoices

and the due date for the payment of the last invoice is 19.09.2014, whereas

the application under Section 9 has been filed on 13.12.2018, beyond the

Comp. App. (AT) (Ins.) Nos. 901 of 2020 & 219 of 2022 2 of 5 period of three years as envisaged under Article 137 of the Limitation Act,

1963 (`the Act') and is thus `barred by Limitation'.

4. It is alleged that the Appellant had issued a cheque dated 10.11.2015

for an amount of Rs. 65,54,884.87/-, which also do not attract the provision

of Section 18 of the Act because if the Limitation is to be counted from

10.11.2015 of a period of three years then it would come to an end on

10.11.2018 whereas the Petition had been filed on 13.12.2018. It is also

submitted that the Respondent filed a Complaint under the Negotiable

Instrument Act, 1881, (`the Act of 1881') before the Court of Metropolitan

Magistrate, 33rd Court, Ballard Pier, Mumbai registered as CC No.

1815/SS/2016 which has been dismissed inter alia on the ground that the

alleged cheque was found to be forged and fabricated.

5. On the other hand, Counsel for the Respondent has submitted that the

Appellant has not taken the defence of limitation either in the Reply to the

Demand Notice or in the Reply to the application filed under Section 9,

therefore, he is not permitted to raise this objection in Appeal.

6. He has further submitted that the Respondent was appointed as a Del

Credere Agent of Reliance Industries Limited. He had made the payment to

the Reliance Industries Limited of the goods supplied to the CD and then he

had to recover the said amount from the CD. It is further submitted that the

question of Limitation is a mixed question of law and fact. Had the Appellant

pleaded this fact that the application filed by the Respondent is beyond the

period of Limitation, the Respondent would have setup his defence along with

relevant documents to show that the Petition filed under Section 9 was within

the period of three years.

Comp. App. (AT) (Ins.) Nos. 901 of 2020 & 219 of 2022 3 of 5

7. He has further submitted that the Order passed by the Metropolitan

Magistrate has further been challenged by the Respondent in an Appeal which

is still pending, therefore, it is yet to be established as to whether the cheque

dated 10.11.2015 was actually forged or not.

8. We have heard Counsel for the Parties and perused the record with their

able assistance.

9. There is no dispute that a Petition under Section 7 or 9 has to be filed

within a period of three years in terms of Article 137 of the Act and the period

of three years is to be counted from the date when the default had occurred.

It is also not in dispute that the Appellant had not taken the defence either in

their Reply dated 27.11.2018 filed to the Demand Notice dated 06.11.2018 or

in the Reply filed to the application under Section 9. However, it is a well

settled that the plea of Limitation can still be setup in Appeal in view of Section

3 of the Act which provides that `subject to the provisions contained in

Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and

application made after the prescribed period shall be dismissed, although

limitation has not been set up as a defence'.

10. In view of the provision mentioned hereinabove of the Act, the plea of

Limitation can be setup in defence even in the Appeal if it is not setup before

the Tribunal.

11. Be that as it may, since the question of Limitation is a mixed question

of law and fact, therefore, the Appellant was required to setup his defence. In

this case, the Respondent has submitted that had the question of Limitation

been setup by the Appellant in defence before the Tribunal, he would have led

evidence to prove that the period of Limitation had not expired in view of the

Comp. App. (AT) (Ins.) Nos. 901 of 2020 & 219 of 2022 4 of 5 fact that he had made the payment to the Reliance Industries in the Year 2015

etc., and on the basis of which the Resolution is being sought about the

aforesaid invoices. The other thing is that the Memo of dishonoured cheque

is dated 18.12.2015.

12. Keeping in view the aforesaid facts and circumstances of this case and

that the issue of Limitation is to be decided after allowing both the Parties to

lead their evidence, if any, we find it just and expedient to set aside the

impugned order and remand the case back to the Tribunal to decide the

question of Limitation by affording the Parties an opportunity to lead evidence

in support of their case, if any. The Parties are directed to appear before the

Tribunal on 26th February, 2024. It is needless to mention that we have not

expressed our opinion on the merit of this case.

Comp. App. (AT) (Ins.) No. 219 of 2022

Counsel for the Appellant has submitted that with the passing of the

Order in Comp. App. (AT) (Ins.) No. 901/2020, the present Appeal has become

infructuous.

Dismissed as infructuous.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Ajai Das Mehrotra] Member (Technical) himanshu/kam

Comp. App. (AT) (Ins.) Nos. 901 of 2020 & 219 of 2022 5 of 5