2022 (12) TMI 368 - AT - Insolvency and Bankruptcy

Tribunal upholds Liquidator's claim under Insolvency Code, dismisses appeal on limitation and debt settlement

The Tribunal held that the claim filed by the Liquidator under Section 60(5) of the Insolvency and Bankruptcy Code was not barred by limitation. The ... Liability to pay the dues to the ‘Corporate Debtor’ - outstanding dues of inter-company transfer - Corporate Debtor in liquidation - time limitation - amount due and payable - tri-partite agreement - whether the claim filed by Liquidator under sub-Section (5) of Section 60 of the Code is governed by Article 137 of the Limitation Act, 1963 and if the claim is enforceable by law as on the date of the Liquidation Order, or is it barred by Limitation? - Whether the amount is due and payable as it is the case of the Appellant that the dues were settled by way of inter-company transfers pursuant to a Tripartite Agreement entered into between the Corporate Debtor, its Sister Concern and the Appellant? - HELD THAT:- Section 60(6) of the Code is similar to Section 458A of the Parent Company Act, 1956, which deals with exclusion of certain Limitation period. Likewise, Section 60(6) of the Code says that notwithstanding anything contained in the Limitation Act, 1963 or in any other law for the time being in force in computing the period of Limitation specifies for any Suit or Application by or against a Corporate Debtor, for which an Order of Moratorium has been made under this part the period during which Moratorium is in place shall be excluded. If the claim is legally enforceable, the period of Limitation will run from the date of commencement of CIRP till the date on which the winding-up Order is made i.e., Moratorium under Section 14 of the Code - In the instant case, the last invoices for the supply of good by the Corporate Debtor is dated 16.06.2015 and it is the case of the Appellant that the Recovery Proceedings, if any, ought to have been initiated within three years i.e., on or before 16.06.2018. In this case, the Moratorium was in effect from 02.01.2018 to 12.10.2018 and this period shall be excluded in computing the period of Limitation specified for any Suit or Application by or against the Corporate Debtor in accordance with the provisions of sub-Section (6) of Section 60 of the Code. The period of Limitation of three years would therefore be either from the date of the CIRP or Liquidation Order since the Resolution Professional or Liquidator can act on behalf of the Corporate Debtor only after their appointment and if the impugned Claim is legally enforceable as on the date of the CIRP as well as on the date of Liquidation, by exclusion of Limitation as provided for under Section 60(6) of the Code, it cannot be said that the Claim is barred by Limitation. It is the case of the Appellant that the 8 months delay was because they were undergoing SARFAESI Proceedings and could not find the documents. When the amount payable is to a tune of Rs.24,36,00,048/-, it is not understood as to how even a copy of the Tripartite Agreement was not traceable/could not be placed for 8 long months. The communication relied upon by the Appellant is dated 08.01.2016 and does not give any details with respect to the authorised signatory, nor any acceptance by the Corporate Debtor for this request of transfer. The Learned Counsel for the Respondent vehemently denies that such an Agreement was ever entered into. As regarding the CBI enquiry and the other issues raised by the Appellant are not being adjudicated in this Appeal as they are not within our domain regard being had to the facts of the matter on hand. The only question which needs to be addressed to, is whether the Adjudicating Authority was justified in allowing a Liquidator to claim the amount due and payable to the Corporate Debtor. In the absence of any concrete evidence on record that the amounts were indeed transferred to the Sister Concern, nor any acceptance letter by the Corporate Debtor, agreeing to such transfer, and also having regard to the fact that there is no denial by the Appellant herein with respect to the actual transactions, having been executed, we do not see any illegality or infirmity in the Impugned Order. Appeal dismissed. Issues Involved:1. Whether the claim filed by the Liquidator under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) is governed by Article 137 of the Limitation Act, 1963, and if the claim is enforceable by law as on the date of the Liquidation Order, or is it barred by LimitationRs.2. Whether the amount is due and payable, as the Appellant claims that the dues were settled by way of inter-company transfers pursuant to a Tripartite Agreement.Detailed Analysis:Issue 1: Limitation and Enforceability of the Claim- The Appellant argued that Section 60(6) of the IBC cannot save a time-barred claim and that the moratorium under Section 14 does not create any embargo on the institution of suits and proceedings by/on behalf of the Corporate Debtor during the CIRP. The Appellant also contended that the Liquidator should have filed a civil suit under Section 35(1)(k) before the appropriate forum rather than converting the Adjudicating Authority into a Trial Court under Section 60(5) of the IBC.- The Tribunal emphasized that Section 60(5) of the IBC aims to prevent multiplicity of suits and to have a single forum determining cases affecting the assets or liabilities of the Corporate Debtor under liquidation. Section 60(6) of the IBC, similar to Section 458A of the Companies Act, 1956, excludes the period of moratorium from the limitation period for any suit or application by or against a Corporate Debtor.- The Tribunal noted that the last invoices for the supply of goods by the Corporate Debtor were dated 16.06.2015, and the moratorium was in effect from 02.01.2018 to 12.10.2018. This period should be excluded in computing the limitation period. Under Article 137 of the Limitation Act, 1963, the period of limitation is three years from when the right to apply accrues. Therefore, the Tribunal held that the claim was not barred by limitation.Issue 2: Due and Payable Amount- The Appellant claimed that the dues were settled by inter-company transfers pursuant to a Tripartite Agreement between the Corporate Debtor, its Sister Concern (Thribovan), and the Appellant. The Appellant argued that the Liquidator erroneously relied on the Corporate Debtor's books of accounts without considering the alleged Tripartite Agreement.- The Tribunal found no evidence of the Tripartite Agreement being filed before the Adjudicating Authority. The communication relied upon by the Appellant dated 08.01.2016 did not provide details of the authorized signatory or any acceptance by the Corporate Debtor for the transfer request. The Tribunal noted that the Appellant failed to provide concrete evidence that the amounts were transferred to the Sister Concern or any acceptance letter by the Corporate Debtor agreeing to such a transfer.- The Tribunal concluded that there was no denial by the Appellant regarding the actual transactions executed, and therefore, upheld the Adjudicating Authority's decision allowing the Liquidator to claim the amount due and payable to the Corporate Debtor.Conclusion:- The Tribunal dismissed the appeal, finding no illegality or infirmity in the Impugned Order. The Adjudicating Authority's decision to allow the Liquidator to claim the amount due and payable to the Corporate Debtor was upheld. The Tribunal granted the Appellant four weeks from the date of the order to make the payment.