AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 113
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.... Making submissions on behalf of the Appellant-Operational Creditor, the Ld. Counsel for the Appellant submitted that the Operational Creditor had been engaged by the Corporate Debtor for providing services to their clients for operation and maintenance of HVAC systems located at various work sites and that a running account was maintained with the Corporate Debtor for this purpose. Elucidating on the payment mechanism, it was submitted that the Operational Creditor raised invoices for the payment for services rendered, supported by necessary documents like ESI/PF challans and Wages Register etc. to the Corporate Debtor. The Corporate Debtor after necessary verification would forward these invoices/documents to their clients for whom the Operational Creditor had performed their services. Once the clients released payments to the Corporate Debtor, after making TDS deduction, the Corporate Debtor would in turn release payments to the Appellant after holding back some amount as retention money. It was submitted that the Corporate Debtor later on failed to discharge their payment obligations. Subsequent correspondences with the Corporate Debtor regarding the outstanding invoices only y....
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....g the submissions made by the Appellant, the Ld. Counsel for the Corporate Debtor submitted that the invoices raised relate to work orders issued from 2010 to 2019. The operational debt raised in the Demand Notice dated 17.02.2024 was in respect of claims arising out of invoices which had fallen due more than 3 years back. Quite clearly, therefore, the claim was time-barred. Moreover, the invoices had been disputed much before the claims were time- barred under the Limitation Act. In terms of their business arrangement, the invoices submitted by the Operational Creditor required certification from the Corporate Debtor, however, the Operational Creditor did not furnish any supporting document like purchase order or work order or certified invoices in respect of the claim raised by them. The Operational Creditor had also failed to provide attendance sheet, wage register, PF and ESIC challans of the employees deployed at the site which fact had been brought to the notice of the Operational Creditor. It was also pointed out that there are several e-mails correspondences which show ongoing disputes between the two parties regarding work certification, amounts and supporting documentatio....
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....ebtor on the IU on 13.02.2023 and 19.06.2023 as placed at page 336-339 of the APB. The NeSL had thereafter sought the confirmation of the Corporate Debtor on the financial debt registered with the IU but did not receive any confirmation from the Corporate Debtor following which it issued the Record of Default to the Operational Creditor holding the debt of the Corporate Debtor as "Deemed to be Authenticated" on 04.03.2024 as placed at page 346 of APB. The Operational Creditor issued a Demand Notice in Form-3 dated 17.02.2024 as placed at page 343 of the APB. In Form-3, we find that the amount claimed to be in default is Rs. 1,20,46,835/- only. It is further stated therein that the date from which the debt fell due was 15.11.2010 and that the date on which the default occurred was 11.08.2022. The Corporate Debtor replied to the Demand Notice on 01.03.2024 as placed at page 353 of the APB denying its liability besides raising disputes with regard to invoices, lack of supporting documents and time-barred claim. The Operational Creditor filed the Section 9 application for initiation of CIRP of the Corporate Debtor on 29.08.2024. 8. Having noticed the above facts, we now proceed to l....
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....outstanding payment in respect of all the invoices. It was contended that the Adjudicating Authority had contravened the statutory mandate of Section 9(5) of the IBC in having failed to appreciate the binding nature of IU Records. It was also contended that Form-26AS entries showing TDS deduction alongwith uncontroverted IU Records reinforce that the limitation period had been extended of the operational debt. 10. Per contra, it is the contention of the Corporate Debtor that the work order issued by the Corporate Debtor was not one common, single work order. The invoices raised related to several disconnected and disparate contracts as is evident from the particulars mentioned in the invoices which depict the name of different work-sites. Thus, it is misplaced for the Appellant to contend the invoices to be running invoices. As payments released by the Corporate Debtor could be mapped to specific invoices, the default was necessary to be factored in invoice wise. In other words, default in the payment of each invoice constituted independent default with each invoice having its own period of limitation. Hence, part payment which was made by the Corporate Debtor on 18.02.2021 was ....
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....even then the three-year limitation period would have come to an end on 17.02.2024. However, it is an undisputable fact that the Section 9 application was filed on 29.08.2024 which was clearly beyond the three years period of limitation. Thus, we have no doubts in our mind that even if we calculate the period of limitation from 18.02.2021, the invoices stood time- barred. 13. We are also not persuaded by the claim of the Operational Creditor that their business arrangement with the Corporate Debtor was on a running account basis and hence part payment clearly renewed the limitation period for all the invoices which remained unpaid. When we look at the material placed on record by the Operational Creditor particularly the invoices from page 67 onwards of the APB, the invoices relate to multiple work sites, unrelated to each other like the Rashtrapati Bhawan, MGF Mega City, IIT Delhi, IRCA Building Northen Railway, TATA Power, Jubilant Ltd., Talkatora Stadium which all goes to show that there was no overarching or inter-connected relationship of the innumerable invoices. There is no one common contract either on record to prove to the contrary that the invoices had a clear and ove....
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....yments made & adjusted but showing pending 2. Rs. 15.03 Lacs PO deleted due to compliances not submitted by Vendor on time, after several mail reminders 3. Remaining No PO/OLD/Untraceable/NO Provision available/No records We once again request you to kindly revalidate the above details from your end (point Sl.1) and establish the claims for Point Sl.2 & 3 to review from our end. The reconciled statement is attached FYI pls. Thanks & Regards A. K. Mohanta" "Thu, Dec 22, 2022 at 11:00 AM <[email protected]> To: Mahender kumar <[email protected]>, [email protected] Cc:JoginderSingh/EM&RBG/DEL<[email protected]>,Jitender Kumar/EM&RBG/DEL<[email protected]>AKMohanta/EM&RBG/DEL<[email protected]> Dear Mr Sharma & Mohammed, Final Reminder!!! Since last so many months we are asking to submit the Complete set of Documents as per your claims, for which you failed to submit. Rs. 15.03 Lacs you have submitted & entire set in Photocopy. Any how need to close the matter by 31-Dec'22 therefore we are in force to assuming that other than Rs. 15.03 Lac....
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....ing the liability and not the creditor's action of filing the information with the IU. The acknowledgment must demonstrate a conscious acceptance of the subsisting liability by the debtor which is clearly distinct from the mere administrative filing of information by the Operational Creditor with an IU. 18. At this juncture we may have a look at Regulations 20 and 21 of the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 which governs the situation. Regulation 20 of the Information Utilities Regulations, 2017 is as follows:- "20. Acceptance and receipt of information.- (1) An information utility shall accept information submitted by a user in Form C of the Schedule. [(1A) Before filing an application to initiate corporate insolvency resolution process under section 7 or 9, as the case may be, the creditor shall file the information of default, with the information utility and the information utility shall process the information for the purpose of issuing record of default in accordance with regulation 21.] (2) On receipt of the information submitted under sub-regulation (1) [or sub regulation (1A), as th....
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....f the Reserve Bank of India Act, 1934, the information utilities will record the status of authentication of information of default as indicated in the Table 2 below: TABLE-2 Sl. No. Response of the Debtor Status of Authentication Colour of the Status (1) (2) (3) (4) 1 Debtor confirms the information of default Or (b) Debtor does not respond even after three reminders Authenticated Green 2 Debtor disputes the information of default Disputed Red (4) After recording the status of information of default under sub-regulation (3), the information utility shall communicate the status of authentication in physical or electronic form of the relevant colour, as indicated in column (4) of the Tables 1 or 2, as the case may be, by issuing a record of default in Form D of the Schedule, to the registered users who are- (a) creditors of the debtor who has defaulted in payment of a debt; (b) parties and sureties, if any, to the debt in respect of which the information of default has been received.]" 19. At the outset we must add that the information stored in an IU is no doubt a repository of verified and authenti....
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....nancial record in the IU, it would be grossly erroneous to hold that the Corporate Debtor had expressed their intention to admit a jural relationship of debtor and creditor in respect of any subsisting liability. 23. Thus, to answer the question whether the claim was barred by limitation, our answer is in the affirmative. 24. Having found the Section 9 petition to be time-barred and therefore not maintainable, it may not be of much relevance to examine whether the operational debt was mired in a pre-existing dispute. However, since this aspect has been challenged by the Appellant, we may proceed to satisfy ourselves whether the impugned order can sustain itself on this ground also. 25. Submission was made by the Operational Creditor that the financial information of debt registered with the IU was apprised to the Corporate Debtor by IU which was never disputed by the Corporate Debtor. It was also submitted that though the services of the Operational Creditor had been used by the Corporate Debtor, it withheld the payment of legitimate dues for frivolous reasons like non-availability of documents though the same had been provided several times. Submission was pressed that th....
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....es deployed by at the site. Though we have been demanding the same on various occasions you failed to provide the details of the same, which itself demonstrates that you have breached the terms and conditions of the Purchase Order and not-complied with the labour certification of bills while submitting the same. This fact was informed by us to you on various instances. Moreover, amongst the other details, most of the invoices lack material particulars with respect to the Purchase Order and/or Work Orders. We hereby deny and dispute the invoices annexed to your notice in totality. 7. We state that we have been demanding the compliance documentation supporting your bills/claims for past two and half years, but you have neglected to produce them. Till date you have only submitted the compliance documents in support of your billing for Rs. 15,03,000/-. Furthermore, we have explicitly informed you vide our email dated 22nd December, 2022 that if you have any further claim in addition to Rs. 15,03,000/-, you must submit it on or before December 31, 22, but you failed to provide the same till date. Hence, based on email dated 22nd December, 2022, we assumed that there were no add....