TaxTMI 
TaxTMI 
2020 (8) TMI 492
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....Adjudicating Authority at paragraphs 26 & 27 observed as under: ... "26. "We have gone through the contents of the application filed in Form No. 5 and find the same to be complete. As discussed above, there is an unpaid operational debt amounting to Rs. 24,74,085/- plus interest @ 18% p.a.. Copy of the work order dated 19.08.2011 is attached as Annexure A1. Moreover, demand notice in Form No. 3 was also sent on 01.03.2018 stating that the amount due from the corporate debtor to the operational creditor is Rs. 37,72,979/- including interest. We have held above that the demand notice in form No. 3 dated 01.03.2018 was properly delivered by the operational creditor and the reply has been examined above and found to be not acceptable. IRP is not proposed in Part III of Form No. 5." 27. In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, we admit the petition for initiation of the CIRP process in the case of the Corporate Debtor M/s Hind Inns & Hotels Limited and direct moratorium and appointment of Interim Resolution Professional as below:" ... FACTS: 3. The facts of the case are that the Operational Creditor i.e.,....
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.... the amounts, even after issuance of Demand Notice, the Operational Creditor filed Application before the Adjudicating Authority claiming an amount of Rs. 24,74,085/-. In Part-4, it is stated that the right to recover Retention Money first accrued to the Operational Creditor on 01.04.2015. 5. However, it is mentioned that debt fell due from 27.07.2015 when Ginger Hotel sent a mail to the Operational Creditor. The Adjudicating Authority having considered all aspects in the Application, admitted the Application and initiated Corporate Insolvency Resolution Process (in short 'CIRP') including declaration of Moratorium. 6. Learned Counsel for the Appellant submitted the following grounds: i) That the Retention Money does not fall within the definition of Operational Debt as defined in Section 5(21) of IBC). ii) Retention Money should have been raised only after successful completion of work. iii) The Respondent No. 2 i.e., the Operational Creditor does not fall within the definition of Operation Creditor as defined in Section 5(2) of IBC. iv) The default accrued on 01.04.2013 whereas the Application was filed before the Adjudicating Authority i....
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....ent. As per Clause 6.28.1 certificate of completion need to be issued by the Employer i.e., Corporate Debtor after completion of work or the contract as the case may be. At clause 6.29.1 Defects Liability Period has been mentioned. Clause 6.29.1 a) the Defect Liability Period shall be 12 calendar months after completion of work as certified under Clause 6.28. Any defects in material or workmanship observed, in the entire work during the execution of work within Defect Liability Period, the same shall be notified in writing by the Employer to the Contractor and shall be rectified by him at his own cost within the time as specified by the Employer. According to the learned Counsel for the Respondent No. 2, the Defect Liability Period has been notified/mentioned by the Corporate Debtor and which commences from 31.03.2014 till 01.04.205 i.e., one-year period. The terms of payment have been mentioned in Claue-8 of the Work-cum-Tender Document. As per the said clause, release of retention money to the Contractor will be after preparation of Final Bill and acceptance of the same by the Contractor and after expiry of Defect Liability Period, specified in the contract, reckoning from the da....
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....rtificate, Defect Liability Period commenced from 31.03.2014 till 01.04.2015. The Operational Creditor, after completion of the Defect Liability Period, addressed a letter dated 10.04.2015 to the Corporate Debtor seeking release of retention money and balance payment for civil works. Letter dated 10.4.2015 (page-107) specifically mentioned that the Defect Liability Period of 12 months has expired successfully and hence requested the Corporate Debtor to release retention money of Rs. 24,74,088/- and also requested to release balance amount against final bill of Rs. 1,60,195/-. 13. The view of this Tribunal, the Defect Liability Period had been completed on 01.04.2015 and the Operational Creditor had requested vide their letter dated 10.04.2015 to release the retention money. Prior to April, 2015, the Corporate Debtor had not raised any dispute with regard to quality or incompletion of the work even after to their letter dated 10.04.2015. The Corporate Debtor, vide e-mail dated 13.07.2015 (at page 119 of Paper Book) addressed to the Operational Creditor regarding water accumulation observed by them in -1 parking site. The said e-mail is reproduced hereunder: "Dear Mr. ....
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....dispute by the Corporate Debtor, hence, we conclude that there is no pre-existing of dispute. The Operational Creditor had awarded the work and the retention money cannot be treated as separate money. The retention money is a part of main bill which was retained by the Corporate Debtor as per the terms of the Work Order and the same shall be released after completion of the work and issuance of the Completion Certificate. Further the Defect Liability Period completed on 01.04.2015 and thereafter the Operational Creditor had requested the Corporate Debtor to release money. We are of the view that it is not barred by limitation. Learned Adjudicating Authority rightly observed and held that the debt fell due from 27.07.2015 when the mail was sent by Ginjar Hotel of the Corporate Debtor stating that the Operational Creditor had attended to all the concerns and rectified the same. The other submission of the learned Counsel for the Appellant that debt does not fall within the definition of Section 5(21) of IBC is concerned, the Operational Creditor had rendered services and there is no dispute with regard to the said services and we cannot accept that the said claims will not fall under....
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....ate Debtor as the case may be. The debt has been defined in Section 3(11) means a liability or obligation in respect of a claim which is due from any person and includes a Financial Debt and Operational Debt. In view of the definition of debt and default, the retention money, which is part of the main bill, comes under the definition of debt and default. 24. Having dealt with the facts and legal position as discussed above, now we deal with the precedents/judgments relied upon by the learned Counsel for both the parties. 25. Learned Counsel for the Appellant relied upon the Judgement of the Hon'ble Supreme Court in the matter of "B.K. Educational Services Pvt. Ltd. Vs. Parag Gupta & Associates" [2018 SCC Online 1921] on the ground that the claim of the Respondent No. 2 herein was barred by limitation and the Hon'ble Supreme Court held at paragraph-48 that the Limitation Act is applicable to Applications filed under Sections 7 & 9 of IBC from the inception of the Code. Article 137 of the Limitation Act gets attracted. The right to sue therefore accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the Application, the Applic....
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....djudicating Authority must reject the Application filed under Section 9(5(2)(d) of IBC after notice of dispute has been received by the Operational Creditor or there is a record of dispute in the Information Utility. In the present case, the Adjudicating Authority held that the Corporate Debtor had not established that the Corporate Debtor had raised any dispute prior to the issuance of Demand Notice and therefore, it was concluded that there is no dispute. However, with regard to the Judgment relied upon by the learned Counsel for the Appellant on the point of limitation that the Application filed by the Respondent No. 2 is barred by limitation is concerned, this Tribunal is of the view that the Application filed by the Respondent No. 2 is within limitation period, taking into consideration that the e-mail dated 21.07.2015 addressed by the Corporate Debtor to the Operational Creditor wherein it is clearly stated that, "As we spoke- we very much appreciate that you have attended all our concerns and rectified the same as and when required. Keeping the same into consideration, kindly please ask someone from your office to attend this issue as a Special case request, we shall be grea....