Karveer Nivasini Engineers & Suppliers vs Popular Steel Works And Agricultural ...

Karveer Nivasini Engineers & Suppliers ...Appellant

Versus

Popular Steel Works and Agricultural Implements ...Respondent Pvt. Ltd.

Present: For Appellant: Mr. Jasmeet Singh, Mr. Pushpendra S. Bhadoriya, Advocates For Respondent: Mr. Bhrigo Dhami, Mr. Rudresh Jagdale, Advocates

ORDER

24.08.2022: Heard Learned Counsel for the Appellant as well as Learned

Counsel appearing for the Respondent.

2. This Appeal has been filed against the Order dated 20.01.2022. By

which Order, the Adjudicating Authority has rejected the Section 9 Application

of Insolvency and Bankruptcy Code, 2016 filed by the Appellant. The

Appellant-Operational Creditor has issued a Demand Notice under Section 8

of the Code on 06th February, 2020 which Demand Notice is said to be replied

by the Corporate Debtor. An Application under Section 9 of the Code was filed

on 01st May, 2020 alleging default of amount of Rs. 1,21,64,716/-.

3. In Section 9 Application, Notices were issued to the Corporate Debtor

however the Corporate Debtor did not file any Reply in spite of opportunities

given by the Adjudicating Authority. The Adjudicating Authority proceeded ex- -2-

parte against the Corporate Debtor on 23rd December, 2021 and by the

Impugned Order has rejected the Application as barred by time.

4. Learned Counsel for the Appellant challenging the Order contends that

Application was not barred by time since the Adjudicating Authority has not

correctly noticed the date of letter 15th May, 2017 which was date of balance

confirmation by the Corporate Debtor. The letter dated 15th May, 2017

contains the balance confirmation by the Corporate Debtor as on 31st March

2017. He submits that in view of the aforesaid, the Application under Section

9 filed on 01st May, 2017 was well within three years form the aforesaid date

hence the Adjudicating Authority committed error in rejecting the Application.

5. Learned Counsel for the Respondent submits that in the Application

filed by the Appellant they have claimed that last payment was received on

08th February, 2017 hence cause of action arose to the Appellant after 08th

February, 2017 hence the Application was barred by time filed on 01st May,

2020.

6. We have considered the submissions of Learned Counsel for the Parties

and have perused the record.

7. In paragraph 10.2 of the Impugned Order, the contention regarding

limitation has been noticed. It has been noticed that Corporate Debtor has

given confirmation of balance sheet ending 31st March vide its letters, last

letter being sent on 15th May, 2017. The Adjudicating Authority in Paragraph

10 has come to the conclusion that three years have passed for the period for Company Appeal (AT) (Insolvency) No. 176/2022 -3-

which the balance confirmation was given i.e. 31st March, 2017 on the date of

filing of petition on 01st May, 2020 hence it is barred by time.

8. Letter dated 15th May, 2017 which has been relied on by the Learned

Counsel for the Appellant have been filed as Annexure A-5 to the Application

which is confirmation of balance for the year ending 31st March, 2017. Letter

was issued on 15th May, 2017 hence the date of acknowledgment will be 15th

May, 2017 to attract Section 18 of the Limitation Act. We thus are of the view

that Application filed under Section 9 on 01st May, 2020 was well within three

years from the acknowledgement under Section 18 given by balance

confirmation on 15th May, 2017. The mere fact that balance confirmation was

given as on 31st March, 2017 shall not change the date of acknowledgment i.e.

15th May, 2017. In view of the balance confirmation, Appellant was entitled for

extension of limitation and Application having been filed within three years

could not have been rejected as barred by time. We thus are of the view that

Adjudicating Authority committed error in rejecting the Application as barred

by time. We set aside the Impugned Order dated 20th January, 2022 and revive

the Application C.P. No. 969/IBC/(MB)2020 before the Adjudicating

Authority.

9. Learned Counsel for the Respondent submits that Respondent could not

file Reply earlier due to certain reasons and since the matter is now being sent

back for fresh consideration, opportunity be given to file a Reply on other

grounds apart from limitation. Respondent is permitted to file a Reply-Affidavit

on payment of cost of Rs. 50,000/- which shall be paid to the Appellant. The Company Appeal (AT) (Insolvency) No. 176/2022 -4-

Reply-Affidavit can be filed within two weeks after payment of the cost to the

Appellant. The Appeal is allowed to the above extent.

[Justice Ashok Bhushan] Chairperson

[Justice M. Satyanarayana Murthy] Member (Judicial)

[Mr. Barun Mitra] Member (Technical)

Basant/nn

Company Appeal (AT) (Insolvency) No. 176/2022