NCLAT (22.01.2021) in MCC Concrete Vs Northway Spaces Ltd. [Company Appeal (AT) (Ins) No. 527 of 2020] held that;
The ledger account is a running account which shows that on 05/11/2015, the respondent has made payment of Rs. 12 lacs to appellant and from this date of acknowledgement within three years, that is on 15/01/2018 the application is filed. Thus, the application is within period of limitation. We agree with the finding of the Adjudicating Authority that the application is filed within the period of limitation.
Excerpts of the order;
This Appeal has been preferred by the Appellant M/s MCC Concrete (Operational Creditor) against the order dated 12/02/2020 passed by the Adjudicating Authority (National Company Law Tribunal), Ahmadabad Bench, Ahmadabad. Whereby the Application preferred by the Appellant under Section 9 of the Insolvency and Bankruptcy Code (In Short I&B Code) has been rejected.
# 2. Brief facts of this case are that the Operational Creditor (Appellant herein) has supplied ready MCC Concrete at various sites of the Corporate Debtor (Respondent herein) upon placing purchase order by the Corporate Debtor. Pursuant thereto the Operational Creditor had issued invoices upon the Corporate Debtor along with delivery challans. The delivery challans are signed and stamped by the Corporate Debtor. The Corporate Debtor was earlier known as Mayfair Spaces Ltd. Hence, all the invoices and delivery challans were issued in the name of Mayfair Spaces Ltd. As per ledger account the Operational Creditor has supplied goods to the Corporate Debtor for the total sum of Rs. 02,29,94,288/-. Whereas, the Corporate Debtor has made part payment of Rs. 02,09,30,948/-. Even after several email communications, the Corporate Debtor has not made any payment for balance amount of Rs. 20,63,340/-. Therefore on 11/02/2017 the Operational Creditor has sent a demand notice to the Corporate Debtor. Despite receipt of the notice, the Corporate Debtor has neither replied to the notice nor made any payment. Therefore, the Operational Creditor has filed an Application under Section 9 of the I&B Code before the Adjudicating Authority for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.
# 4. After hearing the parties, Ld. Adjudicating Authority held that Operational Creditor is maintaining a running account of the Corporate Debtor and as per the ledger account, the last payment of Rs. 12 lacs were made by the Corporate Debtor on 05/11/2015 and the Application is filed on 15/01/2018. Thus, the application is within limitation. Ld. Adjudicating Authority held that on 15/07/2013 and 18/10/2013 no order was placed by the Corporate Debtor, therefore, the invoices dated 15/07/2013 and 18/10/2013 bearing nos. 661 and 360 have been issued erroneously. Therefore, the Corporate Debtor vide its letter dated 16/10/2013 and 21/10/2013 sent back the invoices stating that the Corporate Debtor has no connection with Mayfair Corporate Park to whom the goods were delivered. On this basis it is held that there is pre-existing dispute regarding the goods supplied and invoices raised thereof. Hence, rejected the application.
# 9. The Hon’ble Supreme Court in Mobilox Innvations Pvt. Ltd. Vs. Kirussa Software Pvt. Ltd. 2017 1 SCC Online SC 353 held as to what are facts to be examined by the Adjudicating Authority while examining an Application under Section 9 of I & B Code which is as follows: -
“34. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine:
- (i) Whether there is an “Operational Debt” as defined exceeding Rs. 1 Lakh? (See Section 4 of the Act)
- (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? And
- (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute?
If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the Application, as the case may be, depending upon the factors mentioned in Section 9(5) of the Act.”
# 17. From the above referred ledger account maintained by the respondent we hold that as on 31/03/2017, operational debt Rs. 19,89,130/- was due and payable and has not yet been paid.
# 21. As we have noted that the appellant is relying on the ledger account maintained by the respondent. In this ledger account the amount of disputed invoices are not shown. Therefore, we hold that there is no dispute between the parties in regard to the aforesaid invoices. Thus, we do not agree with the finding of ld. Adjudicating Authority that there is a pre-existing dispute
between the parties.
# 22. Now, we have considered the objection of ld. counsel for the respondent that the claim is barred by limitation. The ledger account is a running account which shows that on 05/11/2015, the respondent has made payment of Rs. 12 lacs to appellant and from this date of acknowledgement within three years, that is on 15/01/2018 the application is filed. Thus, the application is within period of limitation. We agree with the finding of the Adjudicating Authority that the application is filed within the period of limitation.
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The Limitation Act, 1963.
# Section19. 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.
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