Tribunal upholds Operational Creditor's claim under Insolvency Code.

The Tribunal dismissed the appeal against the order admitting the application under Section 9 of the Insolvency and Bankruptcy Code, 2016. It held that the claim by the Operational Creditor was not barred by limitation due to a continuous cause of action. The Corporate Debtor's acknowledgments of liability and intention to maintain the relationship with the Operational Creditor indicated an ongoing obligation, affirming the debt payable. Consequently, the Tribunal found no merit in the appeal and ordered its dismissal without costs.

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Issues:
Admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 based on a claim being barred by limitation.

Analysis:
The appeal was filed by a shareholder and Director of a company against the order passed by the Adjudicating Authority, admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The appellant argued that the claim by the operational creditor was barred by limitation, contending that there was no debt payable in law, hence no default. The Corporate Debtor had undertaken significant projects in the Oil & Gas Sector for companies like ONGC Petro Additions Ltd. and Indian Oil Corporation Ltd., involving substantial amounts. The dispute arose from work orders issued to a subcontractor, which led to a claim by the Operational Creditor for unpaid amounts.

The Operational Creditor issued demand notices and eventually filed an application under Section 9, which was admitted. The appellant claimed that the cause of action had arisen in August 2013, and since no subsequent cause of action occurred, the claim was time-barred. However, the Operational Creditor argued that there was a continuous cause of action based on communications and acknowledgments of liability by the Corporate Debtor.

The Tribunal referred to legal precedents regarding acknowledgments of liability and continuous cause of action. It noted that the Corporate Debtor had acknowledged the liability in various communications and had not completed the reconciliation process, indicating a continuous relationship with the Operational Creditor. As the Corporate Debtor had accepted a substantial liability in writing and showed an intention to continue the relationship, the Tribunal held that the claim was not barred by limitation.

Based on the facts and legal principles, the Tribunal dismissed the appeal, stating that there was a continuous cause of action, and the Corporate Debtor had acknowledged the liability, thereby affirming the debt payable to the Operational Creditor. The Tribunal found no merit in the appeal and ordered its dismissal without costs.

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