TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 528
X X X X Extracts X X X X
X X X X Extracts X X X X
....e at Mumbai and one at Jamnagar. However, the Jamnagar unit was closed in 2020. The Respondent/Corporate Debtor [Global Extrusions] is engaged in the business of manufacturing copper and zinc alloys based brass rods, tubes, nut clamps etc. As part of their business activities, the parties were regularly purchasing and selling goods to each other and the crucial transactions are explained below: 25.05.2016 to 27.06.2017 Sales The Appellant had supplied materials to the Respondent from their Jamnagar Unit, and raised numerous invoices between 26.05.2016 to 27.06.2017 in all amounting to Rs. 79,44,085/-. [page 69-83]. [Table of Invoices @page 29] 11.03.2019 to 02.01.2020 Purchases The Appellant purchased materials from the Respondent and the amount of purchase was adjusted from the outstanding invoices raised against by the Appellant on the Respondent [page 84-85, 91-98] After adjusting the purchases and sales, a debt of Rs. 73,59,095/-was outstanding against the invoices of Jamnagar Unit [averment @page 133]. 17.10.2018 to 27.05.2019 Sales The Appellant had also supplied materials to the Respondent from their Mumbai Unit and raised four invoices in all for Rs. 49....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mounting to Rs. 2,75,143 is not mentioned at page 122. Further, if the amounts against the 7 invoices mentioned at page 122 are added, it will come to Rs. 18,87,995 and not Rs. 21,63,138 (since the invoice for Rs. 2,75,143 is missed out in that table). The Appellant even accounted for the invoice which was not mentioned by the Respondent in their reply notice, and the principal outstanding debt owed by the Respondent was arrived at after accounting all the invoices of the Respondent. The Appellant had bonafide filed copies of all the invoices raised by the Respondent before the Ld. Adjudicating Authority, Ahmedabad along with their Insolvency Petition as Exhibit - E1 [kindly see reference at page 135]. The same invoices are also filed with the present appeal as ANNEXURE -A/5 (COLLY) as they formed part of the record of the Ld. Adjudicating Authority, Ahmedabad. Hence, even the observation at page 65 (paragraph 10) of the Impugned Order that no rebut is given by the Appellant despite the reply of the Corporate Debtor leaves doubt of a plausible dispute is incorrect. 7. The finding that invoices amounting to Rs. 73,59,059 are out of limitation period is incorrect. 15 invoices were....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ir Mumbai unit as being due on 02.01.2020 in the Chart of Computation [page 103]. This is permissible since the parties were mutually dealing with each other on a regular basis and the accounts were maintained as a running account (barter system of adjusting sales made by the Appellant to the Respondent, from the purchases made by the Appellant from the Respondent) [Kindly see Devesh Saraf vs. Rama Tent House & Anr., CA (AT) (Ins) No. 51 of 2023, judgment dated 11.10.2023 (para 3, 4, 9)]. Hence the period of limitation would commence on 11.03.2019 and/or 02.01.2020, and due to the Covid-19 Pandemic and the order dated 10.01.2022 passed by the Hon'ble Supreme Court of India in M.A. No. 21 of 2022 in MA 665 of 2021 in SMW(C) No. 3 of 2020, the period from 15.03.2020 to 28.02.2022 has to be excluded while computing the period of limitation. Thus, a balance period of limitation of approximately 2 years (period of limitation elapsed was 11.03.2019 to 14.03.2020) was available for the Appellant, and thus, the Insolvency Petition filed on 03.05.2022 was within the period of limitation. 9. Alternatively, the Appellant is entitled to the benefit of Section 25(3) of the Indian Contract Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....before three years of filing and entire amount was time barred. 14. Further, there are dispute, regarding the sale which has been made at Mumbai unit to the Appellant and not been considered. This is a dispute which has been referred and as such, outstanding claimed by the Appellant is in dispute and which is at higher side as some -invoices for sale made by the Answering Respondent has not been considered. 15. Whatever principal outstanding is claimed by the Appellant, after adjusting the time barred debt of Rs. 73,59,095/ it falls much below the threshold limit of Rs. 1 Crore. It may also be noted that there is a no specific acknowledgement of debt as stipulated under Section 18 of the Limitation Act, 1963. In fact, in response to Demand Notice dated 22.11.2021, in the Reply dated 31.12.2021 filed by the Answering Respondent, it has clearly been mentioned that the entire amounts of Rs. 73,59,095/- of Jamnagar Unit is time barred and there is no acknowledgement of debt and on the contrary, it is contended as time barred for Jamnagar Unit and not payable. The Answering Respondent is asking payment for its Mumbai unit treating that nothing is payable for Jamnagar unit as the e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 9 of the Code. 22. The Appellant contends that the finding at paragraph 10 of the Impugned Order that certain invoices raised by the Respondent are not accounted for, and there is a doubt of a plausible dispute is erroneous for following reasons: o All the invoices mentioned in paragraph 4 of the Respondent's Reply Notice dated 31.12.2021 are clearly mentioned in the Appellant's ledger and also in Appellant's ledger with the acknowledgement / confirmation given by the Respondent for the period from 01.04.2019 to 31.03.2020. o The principal debt of Rs. 1,19,67,353/- is arrived at after deducting the sum of Rs. 21,63,138/- from the outstanding of Rs. 1,41,30,491.42/-. o When the sums mentioned against all the invoices set out in paragraph 4 of the Respondent's Reply Notice dated 31.12.2021 are added, it comes only to Rs. 18,87,995/- (as against Rs. 21,63,138/- mentioned therein). This is because the Respondent missed out one invoice and gave wrong figures for the Invoice bearing no.187. However, the Appellant had bonafide disclosed in their Ledger, even the invoice that was left out by the Respondent, and has shown the correct calculation for Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., 1963. Further the said acknowledgement is before the expiry of the period of three years from the date of the invoices raised from 28.05.2016 to 27.06.2017 and the Appellant had filed the Insolvency Application on 03.05.2022 before the Adjudicating Authority, well before the expiry of the limitation period. Thus, amount pertaining to period of 28.05.2016 to 27.06.2017 is not time barred debt as far as the Corporate Debtor is concerned. 24. Rebutting the arguments canvassed by the Appellant, Respondent contends that the outstanding which has been shown in the account statement as Rs. 11967353/- is inclusive of time barred debt of Rs. 73,59,059/-. Appellant has mischievously transferred the entire amount of Jamnagar supply wherein; the invoices had become time barred on dated 31.03.2020 so that it can mislead the Adjudicating Authority as if it is a current dues payable within three years of filing of petition by the Appellant. Whatever principal outstanding is claimed by the Appellant after adjusting the time barred debt of Rs. 73,59,095/- it falls much below the threshold limit of Rs. 1 crore. 25. The main dispute is regarding Jamnagar unit. We note the crucial sales invoic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellant relies on Devesh Saraf vs. Rama Tent House & Anr., CA (AT) (Ins) No. 51 of 2023, judgment dated 11.10.2023]. We first delve into this issue. Firstly, the Respondent has denied the acceptance of unilateral transfer of outstanding balance of Jamnagar unit to the Mumbai unit. Furthermore, even if it is assumed to be accepted, the APB has first four entries - as noted above - which pertain to the year 2016 and total to Rs. 42,57,226/- [Rs 10,64,476 + Rs 10,63,966 + Rs. 10,67,713 + Rs 10,61,071] and as on the date of filing of the petition in 2022 are time-barred and if we deduct these from the Principal debt of Rs 1,19,67,353/-, the CP doesn't meet the threshold. The exclusion period, as claimed by the Appellant under the orders of Hon'ble Supreme Court of India in M.A. No. 21 of 2022 in MA 665 of 2021 in SMW(C) No. 3 of 2020, i.e. the period from 15.03.2020 to 28.02.2022 - to be excluded while computing the period of limitation, is not available for these invoices as three years had already lapsed on 30th May 2019 [basis the invoice no TD/004 dated 30th May 2016. By unilateral adjustment of purchases against earlier invoices as claimed by the Appellant, the Appellant has innova....