Dismissal Upheld: Time-barred application under Insolvency Code due to limitation issues.

The Tribunal upheld the dismissal of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, as it was time-barred due to limitation issues. The Tribunal found that the account did not qualify as a running account, email communications and cheque payments did not constitute an acknowledgment of debt, and the interest claimed was not valid for invoices beyond the limitation period. The appeal was dismissed, and the appellant was directed to seek other legal remedies.

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Issues Involved:
1. Whether the account between the parties can be construed as a "running account."
2. Whether the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, is barred by limitation.
3. Whether the email communications and cheque payments can be considered as an acknowledgment of debt under Section 18 of the Limitation Act, 1963.
4. Whether the interest claimed by the Operational Creditor is valid.

Issue-wise Detailed Analysis:

1. Running Account:
The primary issue was whether the account between the parties could be considered a "running account." The Adjudicating Authority concluded that the account was not a running account. The Tribunal noted that for an account to be considered a running account, there must be continuous debits and credits with balances struck periodically. The Tribunal cited judgments from the Hon'ble Delhi High Court and the Hon'ble High Court of Bombay, which clarified that non-payment of invoices and payments without specifying a particular invoice do not constitute a running account. The Tribunal observed that the payments made by the Corporate Debtor were towards specific invoices, and therefore, the account could not be termed a running account.

2. Barred by Limitation:
The Tribunal examined whether the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, was barred by limitation. The Adjudicating Authority had dismissed the application on the grounds that 17 out of 25 invoices were beyond the period of limitation. The Tribunal agreed with this finding, noting that the earliest unpaid invoice dated 29.04.2015 had a limitation period that expired on 28.04.2018. The application was filed on 24.02.2020, making it time-barred for those invoices. The Tribunal emphasized that the Insolvency and Bankruptcy Code is not a debt collection forum but is meant for resolution and not for penalizing solvent companies for non-payment of disputed dues.

3. Acknowledgment of Debt:
The Tribunal assessed whether email communications and cheque payments could be considered an acknowledgment of debt under Section 18 of the Limitation Act, 1963. The Operational Creditor argued that an email dated 23.10.2018 and a cheque dated 13.03.2017 should be construed as acknowledgments of debt. However, the Tribunal found that the emails were merely payment advice and did not constitute an acknowledgment of liability. The Tribunal also noted that a cheque which has not been encashed cannot amount to an acknowledgment of liability. Moreover, the balance sheets allegedly acknowledging the debt were neither produced before the Adjudicating Authority nor the Tribunal.

4. Interest Claim:
The Tribunal examined the validity of the interest claimed by the Operational Creditor. The interest was claimed at a rate of 24% per annum from the invoices dated 29.04.2015. The Tribunal noted that some invoices did not carry the interest component and that the majority of the invoices were beyond the period of limitation. The Tribunal agreed with the Adjudicating Authority that out of 25 invoices, 17 were barred by limitation, and therefore, the interest claim was not valid for those invoices.

Conclusion:
The Tribunal upheld the Adjudicating Authority's decision to dismiss the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, as barred by limitation. The Tribunal found no illegality or infirmity in the well-considered and reasoned order of the Adjudicating Authority. The appeal was dismissed, and the appellant was advised to avail other remedies in accordance with the law.

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