TaxTMI 
TaxTMI 
2018 (1) TMI 1249
X X X X Extracts X X X X
X X X X Extracts X X X X
....xecution of documents and this was followed up with another invoice bearing No. INAVN/DIN1/0008/14 dated 30.5.2013 amounting to Rs. 89,88,800/- and in relation to the said invoice it is averred by the Operational Creditor that a sum of Rs. 26,98,880/- was paid by the Corporate Debtor towards part payment of the invoice and there yet remains a balance of Rs. 62,89,920/-. Subsequent to the above, it is averred by the Operational Creditor that on 1.7.2014 in relation to the Software License agreement dated 13.5.2013, an addendum was agreed and entered into between the parties. Pursuant to the same, Operational Creditor had issued a Change on Demand Order No. COD. Jun14-1/SK-M&E/2014 and again pursuant to this addendum to the Software License Agreement dated 13.5.2013, it is averred that the Operational Creditor had issued invoice No. INAVN/DIN2/0001/15 amounting to Rs. 59,83,170/- to the Corporate Debtor in terms of the addendum dated 1.7.2014. On 23.7.2014 it is averred that a further invoice was also raised and issued bearing No. INAVN/DIN2/0002/15, amounting to Rs. 33,70,800/- to the Corporate Debtor for additional services and personalization. 2. While so, it is averred by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tor and hence taking into consideration the provisions of Section 9(5)(ii)(c), it is contended that this Tribunal is required to reject the Application inasmuch as the invoices had never been delivered to the Corporate Debtor by the Operational Creditor giving rise to the claim. ii. Despite sufficient time having been granted to the Operational Creditor to file the certificate from the bankers in compliance with the provisions under Section 9(3)(c) of IBC, 2016, the same is not in order as per the requirements of the provisions of IBC, 2016. In this connection, it is also pointed out that the amounts paid to the Operational Creditor by the Corporate Debtor for the period from 13.5.2013 till the issuance of the certificate have not been correctly reflected as the certificate shows only two payments made on 16.8.2013 of Rs. 47,96,095/- and on 7.10.2013 of Rs. 18,00,000/- which is contrary to the averments of Petitioner/Operational Creditor which has admitted at para 5-6 of the synopsis that a sum of Rs. 1,12,36,000/- and Rs. 26,98,880/- have been paid and the said payments have not been reflected in the banker's certificate and in the circumstances the same cannot be con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng made by the Operational Creditor inasmuch as in the legal notice dated 10.11.2016 a sum of Rs. 1,24,25,000/-is claimed as unbilled license fee which is also repeated in another legal notice dated 13.1.2017. However, in the demand notice it had been escalated to Rs. 1,42,88,750/-. vii. The Respondent also takes the plea of the claim being barred by limitation under the provisions of Limitation Act, 1963. viii. Failure to disclose the nature of services which had been rendered by the Operational Creditor to the Corporate Debtor based on which the claim is made and that the services rendered, if any, had been rendered to the satisfaction of the Corporate debtor has also not been stated in the Petition nor any proof filed to sustain such a statement. ix. It is also further pointed out that the evidence of occurrence of default has also not been satisfactorily explained as required under Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 hereinafter called as 'AAA Rules'. x. The Respondent also point out that in relation to the e-mail dated 3.7.2015, it can be discerned that the Operational Creditor ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ealt with. First among them is the plea of limitation. However, in relation to the said plea, the Hon'ble NCLAT has time and again reiterated by way of several of its judgments that Limitation Act, 2013 has no application insofar as the claim made under the provisions of Insolvency and Bankruptcy Code, 2016 (IBC, 2016). The following extract as passed by the Hon'ble NCLAT in the case of Black Pearl Hotels (P.) Ltd. v. Planet M Retail Ld. In Company Appeal (AT) (Insolvency) No.91 of 2017 relating to the aspect of limitation is reproduced hereunder; 7. The questions that arises for consideration is : "Whether the application preferred by appellant-operational creditor is barred by limitation?" 8. Learned counsel for the appellant contended that law of limitation is not applicable and referred to decision of this Appellate Tribunal in "Neelkanth Township and Construction Pvt. Ltd. v. Urban Infrastructure Trustee Ltd."of Company Appeal (AT) (Insolvency) No. 44/2017. 9. In spite of service of notice the respondent has not appeared to contest this appeal. The pleading made in the company petition and the appeal has not been controverted. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to apply under section 9 of I&B Code accrued to appellant since 1st December, 2016, the application filed much prior to three years, the said application cannot be held to be barred by limitation. 7. Taking into consideration the above judgment of Hon'ble NCLAT which has subsequently also consistently reinforced that the plea of limitation cannot be taken into consideration as a ground to challenge maintainability of a Petition under IBC, 2016 the plea of the same raised by the Corporate Debtor herein cannot be considered. 8. The next objection as raised by the Corporate Debtor is in relation to maintainability of the Company Petition on the basis of Section 8 notice issued under IBC, 2016 being the notice of demand issued by a person who is not properly authorized to issue such a notice on behalf of the Corporate Debtor. At the time of oral submissions Ld. Sr. Counsel appearing for the Corporate Debtor/Respondent vehemently stressed on this particular aspect and in this connection reference was made to the typed set filed along with the application to page number 86 and more particularly attention was drawn to page number 89 and it was pointed out by the ld. Sr. Counsel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erson who is authorized to do such an act as the issue of such notice upon the Corporate Debtor envisages serious consequences and also put in motion a chain reaction which ultimately if admitted culminates in the unleashing of Corporate Insolvency Resolution Process. The importance of Section 8 notice being the notice of default, as well as of the strict adherence to the format prescribed has been repeatedly stressed by the Hon'ble NCLAT in several of its decisions and in this connection the decision of the Hon'ble NCLAT passed in the matter of Shriram EPC Ltd. v. Rio Glass Solar SA in Company Appeal (AT) (Insolvency) No 133 of 2017 wherein reaffirming its decision as passed in Uttam Galva Steels Ltd. v. DF Deutsche Forfait AG & Anr. In Company Appeal (AT) (Insolvency) No. 39 of 2017 has stated as follows: "27. From a plain reading of sub-section (1) of Section 8, it is clear that on occurrence of default, the Operational Creditor is required to deliver the demand notice of unpaid Operational Debt and copy of the invoice demanding payment of the amount involved in the default to the Corporate Debtor in such form and manner as is prescribed. 28. Sub-rule (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en days from the date of receipt of letter failing which the 'Operational Creditor' will initiate a Corporate Insolvency Process in respect of 'Corporate Debtor', as apparent from last paragraph No. 6 of notice contained in Form-3, and quoted above. Only if such notice in Form-3 is served, the 'Corporate Debtor' will understand the serious consequences of non-payment of 'Operational Debt', otherwise like any normal pleader notice/Advocate notice, like notice under Section 80 of C.P.C. or for proceeding under Section 433 of the Companies Act 1956, the 'Corporate Debtor' may decide to contest the suit/case if filed, distinct Corporate Resolution Process, where such claim otherwise cannot be contested, except where there is an existence of dispute, prior to issue of notice under Section 8. 32. In view of provisions of I&B Code, read with Rules, as referred to above, we hold that an 'Advocate/Lawyer' or 'Chartered Accountant' or 'Company Secretary' in absence of any authority of the Board of Directors, and holding no position with or in relation to the Operational Creditor cannot issue any notice under Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ereunder:- 9. Upon perusal of the Adjudicating Authority Rules and Form-1, it may be duly noted that the 'I&B Code' and the 'Adjudicating Authority Rules' recognize that a 'Financial Creditor' being a juristic person can only act through an "Authorised Representative". Entry 5 & 6 (Part I) of Form No. 1 mandates the 'Financial Creditor' to submit "name and address of the person authorised to submit application on its behalf (Enclose Authorisation)". 10. The signature block of the aforementioned Form-1 also provides for the authorised person's detail is to be inserted and also includes inter alia the position of the authorised person in relation to the 'Financial Creditor'. 11. xxxx 15. Section 179 of Companies Act, 2013 empowers the Board of Directors to do all such acts that a company is authorised to do. A company being a juristic person is capable of initiating and defending legal proceedings and, therefore, the Board of Directors is empowered to exercise such rights on behalf of the Company or may duly empower 'Authorised Representative' to do so on its behalf. 16. Thereby the perso....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the Bank authorised its officers to do needful in the legal proceedings by and against the Bank. If general authorisation is made by any 'Financial Creditor' or 'Operational Creditor' or 'Corporate Applicant' in favour of its officers to do needful in legal proceedings by and against the 'Financial Creditor' / 'Operational Creditor'/ 'Corporate Applicant', mere use of word 'Power of. Attorney' while delegating such power will not take away the authority of such officer and 'for all purposes it is to be treated as an 'authorization' by the 'Financial Creditor'/ 'Operational Creditor'/ 'Corporate Applicant' in favour of its officer, which can be delegated even by designation. In such case, officer delegated with power can claim to be the 'Authorized Representative' for the purpose of filing any application under section 7 or Section 9 or Section 10 of 'I&B Code'. 37. As per Entry 5 & 6 (Part I) of Form No. 1, 'Authorised Representative' is required to write his name and address and position in relation to the 'Financial Creditor'/Bank. If there is any....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... claimed, in addition to Rs. 1,24,25,000/- claimed towards unbilled licence amount. Further, at page No.85 of the above said letter dated 10.11.2016, it is seen that the Operational Creditor has specifically observed as follows: "We look forward to restarting the project and you may let us know a convenient date to discuss the project planning with both the team." 14. Thus it is quite evident that the project as envisaged by the parties had come to a standstill and that the same is yet to be completed as no records have been placed by both the parties that the same was restarted. It is also seen from the above said letter dated 10.11.2016 a statement has been made to the effect that the invoices have been long overdue from 2013-2014. 15. In this connection the e-mail dated 03.07.2015 filed by the Corporate Debtor along with its typed set, detailing the correspondence sent by the Operational Creditor at page 35, being the project executive status summary discloses that the project progress is 23% and at page No. 38 the same is again reinforced. Hence in the absence of the completion of the project on the part of the Operational Creditor, even assuming that the same is....