M/S Vinayak Laser Tech Pvt Ltd vs M/S Instapower Limited

Company Appeal (AT) (Ins.) No. 244 of 2020 IN THE MATTER OF: Vinayak Laser Tech Pvt. Ltd. ....Appellant

Vs.

Instapower Ltd. ....Respondent

Present: For Appellant: Mr. Anup Kumar, Advocate For Respondent: Mr. Mudit Gupta, Advocate

ORDER

(Per: Justice Rakesh Kumar Jain.)

25.08.2022: The Appellant has challenged the validity of the impugned

order dated 14.01.2020 by which an application filed by the Appellant under

Section 9 of the Insolvency & Bankruptcy Code, 2016 (in short 'Code') has been

dismissed by the Adjudicating Authority (National Company Law Tribunal, New

Delhi, Court No. IV) on the ground of limitation.

2. In brief, the application was filed by the Appellant on the printed form 5,

prescribed under the Insolvency & Bankruptcy (Application to the Adjudicating

Authority) Rules 2016 (in short 'Rules') making the following averments:

2. Amount claimed to be in That the Corporate Debtor was placed default and the date on order for Metal Fabrication items and the which the default occurred applicant was raised invoice in respect of (attach the workings for goods sold and deliver vide invoice no.

computation of amount and 035 dated 10.08.2015 total amount was dates of default in tabular 48,85,800/- (Rupees Forty Eight Lacs form) Eighty Five Thousand Eight Hundred

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only). The Corporate Debtor has made payment against the running accounts.

The default has been occurred from the due date of each invoice as on 10.08.2015 when notice of demand under IBC in Form - 3 & 4 Rule 5 of Insolvency and Bankruptcy (Application to Adjudicating Authority) rules, 2016.

3. The Tribunal has found that since the date of default has been

mentioned as 10.08.2015 and the application is filed on 21.12.2018, therefore,

the application is barred by limitation because a period of three years is

provided to file such an application under Article 137 of the Limitation Act,

1963 (in short 'Act')

4. Counsel for the Appellant has argued that the last payment was made by

the respondent on 14.10.2016 which has been mentioned by it in the demand

notice, which was required to be served upon the Respondent in terms of

Section 8 of the Code but it has been admitted by the Appellant that this plea

was not raised before the Adjudicating Authority.

5. Be that as it may, Counsel for the appellant has submitted that the entry

of the payment of Rs. 1,25,000/- dated 14.10.2016 is reflected in the account

maintained by it but the Appellant could not deny that there is no

acknowledgement in writing of the amount. It is submitted that the limitation

has to be counted from 14.10.2016 and has placed reliance upon the Section

19 of the Act.

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

case set up by the Appellant in form 5 part iv is that the default had occurred

on 10.08.2015, secondly the last payment was made on 14.10.2016, there is

no acknowledgment of the payment dated 14.10.2016 and no plea was taken

that the period of limitation would start in terms of Section 19 of the Act.

7. We have heard Counsel for the parties and perused the record.

8. The facts are not in dispute but in order to appreciate the rival

contention it would be relevant to refer to Section 19 of the Act, which is

reproduced as under:

"19. Effect of payment on account of debt or of interest on legacy.-- Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:

Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.

Explanation.--For the purposes of this section,--

(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment;

(b) "debt" does not include money payable under a decree or order of a court."

9. The argument of Counsel for the Appellant is only to the effect that there

is an entry of the amount having been paid on 14.10.2016 reflected in his

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books of accounts but at the same time, there is no such acknowledgment

which is required to be made in writing and signed. Counsel for Respondent

has relied on a decision of the Hon'ble Supreme Court in the case of Shanti

Conductors (P) Ltd. Vs. Assam State Electricity Board [(2020) 2 SCC 677] to

contend that Section 19 of the Act prescribes two conditions, namely, payment

on account of debt or of interest on legacy is made before the expiration of the

prescribed period by the person liable to pay the debt of legacy and an

acknowledgement of the payment appears in handwriting of, or in a writing

signed by a person making the payment. In so far as, the second condition is

concerned, it is conspicuous by its absence and in this regard reference could

be had to the observations made by the Hon'ble Supreme Court in Para 15 of

the aforesaid judgment which read as under:-

"15. Order 7 Rule 6 uses the words "the plaint shall show the ground upon which exemption from such law is claimed". The exemption provided under Sections 4 to 20 of the Limitation Act, 1963 are based on certain facts and events. Section 19, with which we are concerned, provides for a fresh period of limitation, which is founded on certain facts i.e. (i) whether payment on account of debt or of interest on legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy, (ii) an acknowledgement of the payment appears in the handwriting of, or in a writing signed by, the person making the payment."

10. Further, it has also been held by the Hon'ble Supreme Court that in

order to take benefit of Section 19, necessary pleadings and proof are required

which again is not available in the present case.

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11. Thus, in view of the aforesaid facts and circumstances, we are of the

considered opinion that the Appellant has failed to make out any case to take

advantage of Section 19 of the Act, for the purpose of extension of period of

limitation because the case of the Respondent is covered by the decision of the

Hon'ble Supreme Court in the case of Shanti Conductors (P) Ltd. (Supra).

12. No other point has been raised.

13. In view of the aforesaid discussion, the present appeal fails and hence,

the same is hereby dismissed. No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

sc/rr

Company Appeal (AT) (Ins.) No. 244 of 2020