In the matter of Lasa Engineers Private Limited Vs. Devas Engineering Systems Private Limited CA(AT)(Insolvency)No. 216 of 2019

The Appellant- ‘M/s. Lasa Engineers Private Limited’- (‘Operational Creditor’) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“I&B Code” for short) for initiation of the ‘Corporate Insolvency Resolution Process’ against ‘M/s. Devas Engineering Systems Private Limited’- (‘Corporate Debtor’). The Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai, by impugned order dated 21st January, 2019 dismissed the application on the ground that there is no debt payable in fact as the account balance shows that ‘NIL’ amount is payable by the ‘Operational Creditor’. Further the Adjudicating Authority held that the claim was barred by limitation.

2. Learned counsel for the Appellant submitted that the claim filed by the Appellant was not barred by limitation.

3. It was submitted by counsel for the Appellant that subsequently on issuance of Legal Notices dated 18th July, 2016 and 17th July, 2017 in Form 4, the Respondent sought to take a stand that the claim is barred by limitation.

4. Learned counsel for the Respondent referred to a communication made by the Respondent- M/s. Devas Engineering Systems Private Limited’- (‘Corporate Debtor’) to the ‘Operational Creditor’ dated 5th August, 2013 wherein the ‘Corporate Debtor’ intimated that the balance as on 5th August, 2013 was ‘NIL’. It is stated that no objection was made thereafter.

5. Having heard learned counsel for the parties and on perusal of the record, we find that that the communication made by the ‘Corporate Debtor’ on 5th August, 2013 shows that there is no amount payable to the ‘Operational Creditor’, which was not disputed by the ‘Operational Creditor’.

6. Subsequently, when Legal Notice issued by the ‘Operational Creditor’ on 18th July, 2016 followed by Legal Notice dated 17th July, 2017, the ‘Corporate Debtor’ has taken specific plea that otherwise also the claim is barred by limitation.

7. In the present case, before issuance of the Demand Notice under Section 8(1) on 26th December, 2017, the ‘Corporate Debtor’ has disputed the claim and taken plea that it was barred by limitation. Such plea having been taken by the ‘Corporate Debtor’ prior to 26th December, 2017, we hold that there was a pre-existence of dispute.

8. For the reasons aforesaid, no interference is called for against the impugned order. In absence of any merit, the appeal is accordingly, dismissed. No costs.

[Justice S.J. Mukhopadhaya]

Chairperson

[ Justice A.I.S. Cheema ]

Member (Judicial)

[ Kanthi Narahari ]

Member (Technical)

NEW DELHI

13th November, 2019