w w w . L a w y e r S e r v i c e s . i n

M/s. Rana Alloys Financial v/s M/s. Rana Global Limited

Company & Directors' Information:- T S ALLOYS LIMITED [Active] CIN = U27109OR2004PLC009683

Company & Directors' Information:- B N GLOBAL PRIVATE LIMITED [Active] CIN = U15400PB2014PTC038543

Company & Directors' Information:- K V GLOBAL PRIVATE LIMITED [Active] CIN = U24100DL2014PTC263567

Company & Directors' Information:- GLOBAL CORPORATION LIMITED [Active] CIN = L74999DL1992PLC048880

Company & Directors' Information:- RANA GLOBAL LIMITED [Active] CIN = U70200DL2008PLC179626

Company & Directors' Information:- T & I GLOBAL LTD. [Active] CIN = L29130WB1991PLC050797

Company & Directors' Information:- K G GLOBAL PRIVATE LIMITED [Active] CIN = U74999DL2000PTC104788

Company & Directors' Information:- B P ALLOYS LIMITED [Active] CIN = L27107PB1987PLC007827

Company & Directors' Information:- G. K. ALLOYS PRIVATE LIMITED [Active] CIN = U74999PN2020PTC193107

Company & Directors' Information:- A TO Z ALLOYS PRIVATE LIMITED [Active] CIN = U27100MH2006PTC160869

Company & Directors' Information:- A. V. GLOBAL CORPORATION PRIVATE LIMITED [Active] CIN = U63090DL2007PTC159315

Company & Directors' Information:- V S L ALLOYS (INDIA) PRIVATE LIMITED [Active] CIN = U74899DL1991PTC046396

Company & Directors' Information:- G. M. ALLOYS PRIVATE LIMITED [Active] CIN = U74120DL2007PTC169855

Company & Directors' Information:- C M ALLOYS PRIVATE LIMITED [Active] CIN = U27110MH1999PTC122729

Company & Directors' Information:- R D ALLOYS PVT LTD [Active] CIN = U27320WB1971PTC027983

Company & Directors' Information:- A N GLOBAL LIMITED [Active] CIN = U92110MH1985PLC035269

Company & Directors' Information:- D S GLOBAL PRIVATE LIMITED [Active] CIN = U74899DL1995PTC071516

Company & Directors' Information:- GLOBAL ALLOYS PRIVATE LIMITED [Active] CIN = U27102UP1998PTC023316

Company & Directors' Information:- A K ALLOYS PVT LTD [Active] CIN = U27101PB1989PTC009860

Company & Directors' Information:- A B C GLOBAL PRIVATE LIMITED [Active] CIN = U51909PB2011PTC035103

Company & Directors' Information:- H B S ALLOYS PRIVATE LIMITED [Active] CIN = U27100GJ2012PTC071516

Company & Directors' Information:- K L ALLOYS PRIVATE LIMITED [Active] CIN = U99999PB1989PTC008964

Company & Directors' Information:- B R ALLOYS PVT LTD [Active] CIN = U27101WB1995PTC075793

Company & Directors' Information:- P D ALLOYS PRIVATE LIMITED [Active] CIN = U27100PB2004PTC027669

Company & Directors' Information:- I A T GLOBAL COMPANY PRIVATE LIMITED [Active] CIN = U24116DL1997PTC084916

Company & Directors' Information:- J D GLOBAL PRIVATE LIMITED [Active] CIN = U51909DL1997PTC091270

Company & Directors' Information:- K M U ALLOYS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059238

Company & Directors' Information:- M. R. ALLOYS PRIVATE LIMITED [Active] CIN = U27106PB1990PTC010461

Company & Directors' Information:- B N G GLOBAL INDIA LIMITED [Active] CIN = U52590DL2011PLC225377

Company & Directors' Information:- N K COMPANY (GLOBAL) PRIVATE LIMITED [Active] CIN = U52390WB2010PTC153624

Company & Directors' Information:- K B K GLOBAL PRIVATE LIMITED [Active] CIN = U24296DL2016PTC290487

Company & Directors' Information:- S N ALLOYS PVT LTD [Active] CIN = U27101WB1993PTC059587

Company & Directors' Information:- M J ALLOYS PVT LTD [Active] CIN = U27106WB1985PTC038633

Company & Directors' Information:- S A ALLOYS PRIVATE LIMITED [Active] CIN = U27310DL1996PTC081185

Company & Directors' Information:- M & D GLOBAL PRIVATE LIMITED [Active] CIN = U31101UP1974PTC003937

Company & Directors' Information:- P. B. ALLOYS PRIVATE LIMITED [Active] CIN = U28910UP2010PTC039384

Company & Directors' Information:- V R GLOBAL PRIVATE LIMITED [Active] CIN = U45200WB2007PTC120797

Company & Directors' Information:- M M GLOBAL PRIVATE LIMITED [Strike Off] CIN = U29120WB1986PTC041280

Company & Directors' Information:- R V GLOBAL PRIVATE LIMITED [Active] CIN = U74990MH2009PTC195301

Company & Directors' Information:- M M C GLOBAL INDIA PRIVATE LIMITED [Strike Off] CIN = U11200MH2010PTC206910

Company & Directors' Information:- S R GLOBAL PRIVATE LIMITED [Strike Off] CIN = U51109WB1997PTC084553

Company & Directors' Information:- H V GLOBAL PRIVATE LIMITED [Active] CIN = U18101DL2000PTC103960

Company & Directors' Information:- R P GLOBAL PRIVATE LIMITED [Strike Off] CIN = U74990MH2009PTC193409

Company & Directors' Information:- M S GLOBAL PRIVATE LIMITED [Active] CIN = U70100MH2008PTC213273

Company & Directors' Information:- H. P. ALLOYS PRIVATE LIMITED [Active] CIN = U74999MH2012PTC230070

Company & Directors' Information:- R S V GLOBAL LIMITED [Strike Off] CIN = U51909DL1994PLC059032

Company & Directors' Information:- M K ALLOYS PVT LTD [Active] CIN = U27109PB1992PTC012515

Company & Directors' Information:- R AND J ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27106MH1997PTC110781

Company & Directors' Information:- G S M ALLOYS PRIVATE LIMITED [Active] CIN = U27205HR2009PTC039242

Company & Directors' Information:- K K ALLOYS PRIVATE LIMITED [Active] CIN = U27106PB1996PTC018111

Company & Directors' Information:- P C ALLOYS PRIVATE LIMITED [Active] CIN = U27106CH1990PTC010828

Company & Directors' Information:- N B GLOBAL (INDIA) PRIVATE LIMITED [Active] CIN = U15122UP2012PTC051614

Company & Directors' Information:- S. B. ALLOYS PVT LTD [Strike Off] CIN = U27101PB1990PTC010324

Company & Directors' Information:- G A ALLOYS PRIVATE LIMITED [Active] CIN = U45400DL2008PTC175934

Company & Directors' Information:- L C ALLOYS PVT LTD [Strike Off] CIN = U27107WB1978PTC031690

Company & Directors' Information:- J S S R ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27100CT2011PTC022720

Company & Directors' Information:- S G ALLOYS PRIVATE LTD. [Active] CIN = U74899DL1985PTC021870

Company & Directors' Information:- S P ALLOYS PVT LTD [Active] CIN = U27106PB1990PTC010856

Company & Directors' Information:- N. P. ALLOYS PRIVATE LIMITED [Active] CIN = U27101PB1995PTC016862

Company & Directors' Information:- C K ALLOYS PRIVATE LIMITED [Active] CIN = U27101DL1998PTC095554

Company & Directors' Information:- M M ALLOYS PVT LTD [Strike Off] CIN = U27101RJ1983PTC002780

Company & Directors' Information:- N I ALLOYS PVT LTD [Strike Off] CIN = U27109PB1987PTC007643

Company & Directors' Information:- RANA ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27200DL1995PTC072864

Company & Directors' Information:- D R ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27101MH1999PTC118474

Company & Directors' Information:- A N ALLOYS PVT LTD [Strike Off] CIN = U27106PB1994PTC015052

Company & Directors' Information:- R A ALLOYS PVT LTD [Strike Off] CIN = U27106PB1995PTC016101

Company & Directors' Information:- S B ALLOYS PVT LTD [Strike Off] CIN = U27106CH1990PTC010538

Company & Directors' Information:- S J ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27101PB1995PTC015964

Company & Directors' Information:- S U ALLOYS PVT LTD [Strike Off] CIN = U27104WB1988PTC044767

Company & Directors' Information:- S S R ALLOYS PVT LTD [Strike Off] CIN = U27101WB1974PTC029161

Company & Directors' Information:- S K R S ALLOYS PRIVATE LIMITED [Strike Off] CIN = U28113HR2011PTC042687

Company & Directors' Information:- T R ALLOYS PVT LTD [Strike Off] CIN = U27106PB1990PTC010906

Company & Directors' Information:- G C ALLOYS PVT LTD [Strike Off] CIN = U27101PB1995PTC015760

Company & Directors' Information:- R K ALLOYS PVT LTD [Strike Off] CIN = U27104HP1986PTC006641

Company & Directors' Information:- K R ALLOYS PVT LTD [Strike Off] CIN = U27101HR1981PTC011733

Company & Directors' Information:- B R N ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27101KA1982PTC004759

Company & Directors' Information:- RANA & CO. PRIVATE LIMITED [Strike Off] CIN = U51109DL1997PTC090894

Company & Directors' Information:- D AND L ALLOYS PRIVATE LIMITED [Active] CIN = U27310RJ2006PTC023316

Company & Directors' Information:- A M GLOBAL PRIVATE LIMITED [Active] CIN = U74999MH2015PTC261061

Company & Directors' Information:- L S A GLOBAL INDIA PRIVATE LIMITED [Under Process of Striking Off] CIN = U74900TG2015PTC098308

Company & Directors' Information:- R L GLOBAL INDIA PRIVATE LIMITED [Strike Off] CIN = U52300HP2014PTC000764

Company & Directors' Information:- R. M. ALLOYS PRIVATE LIMITED [Active] CIN = U37100DL2016PTC302431

Company & Directors' Information:- G R GLOBAL PRIVATE LIMITED [Active] CIN = U70102KA2013PTC069586

Company & Directors' Information:- A M ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27310GJ2014PTC078387

Company & Directors' Information:- H. E. GLOBAL PRIVATE LIMITED [Active] CIN = U72901GJ2016PTC092866

    C.P. No. IB-126 (PB) of 2018

    Decided On, 07 May 2018

    At, National Company Law Tribunal New Delhi


    For the Appellant: Varun Kathuria, Advocate. For the Respondent: K.K. Krishna Prabhu, Advocate.

Judgment Text

M.M. Kumar, CJ. (Retd.) President

1. The preliminary question, which arises for our consideration, is whether insolvency process can be triggered in a matter where the default had occurred beyond a period of 3 years and the claim has become time barred on account of period of limitation prescribed by the Limitation Act, 1963 or by virtue of rule of prudence developed by the Courts.

2. Brief facts of the case necessary for disposal of the instant petition are that the Financial Creditor had supplied material and goods to the Corporate Debtor on various dates and time between 2011 and 2012. As per the running account of the Financial Creditor a total principal amount of Rs. 2,60,76,123/- (Rupees Two Crores Sixty Lakhs Seventy Six Thousand only) was due and payable from the Corporate Debtor as on 26.07.2012. The Corporate Debtor vide its letter dated 30.09.2013 admits the liability but expressed its inability to pay the aforesaid outstanding amount for the reason that the working of the company was very negligible and it was not in a position to make the payment. By the aforesaid letter it was further informed to the Financial Creditor that the aforesaid amount will be treated as unsecured loan and till the realisation of the amount, interest @ 15% per annum would be paid to the Financial Creditor. The Corporate Debtor through the very same letter further given assurance to the Financial Creditor that the payment would be cleared within a period of one to three years.

3. On the first date of hearing, we were not satisfied about the maintainability of the petition as prima-facie the claim of the Financial Creditor was hit by delay and latches. Therefore, we granted a week's time to the Financial Creditor to clarify the aforesaid position. Vide diary No. 1138 dated 28.02.2018 the Financial Creditor filed balance confirmation letter dated 31.12.2017 given by the Corporate Debtor wherein it acknowledges the aforesaid outstanding dues as on 31.03.2013.

4. The period of limitation would commence three years preceding the date of filing the petition. The petition was filed on 31.01.2018 and acknowledgment, if any, within the meaning of section 18 of Limitation Act, 1963 has to be shown before 31.01.2015. Even petitioner has failed to demonstrate the fact that in light of the aforesaid letter dated 30.09.2013 single penny in the form of interest as promised by the Corporate Debtor was paid to it.

5. The petitioner has failed to show any iota of evidence to prove acknowledgment of debt and default within the meaning of section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code').

6. Be that as it may the petitioner has not been placed on record any evidence to bring its claim within the period of limitation of three years as provided under Article 13 read with Section 2(j) & 3 of the schedule of the Limitation Act, 1963.

7. Hon'ble the Supreme Court in the case of M/s. Innoventive Industries Ltd. vs. ICICI Bank and Ors., (2018) 1 SCC 407 at para 28 inter alia has observed that, "A debt may not be due if it is not payable in law or in fact."

8. Therefore, non-payment of such stale, time barred and unrecoverable claim by the Corporate Debtor, cannot be termed as a 'default' for triggering the proposed Corporate Insolvency Resolution Process under the Code.

9. Similarly, in the case of M/s. Speculum Plast Private Limited vs. PTC Techno Private Limited, (Company Appeal (AT) (Insolvency) No. 47 of 2017) (2018) 2 Comp Cas OL 695 (NCLAT), Hon'ble NCLAT has held that, "the stale claim of dues without explaining delay, normally should not be entertained for triggering 'Corporate Insolvency Resolution Process' under Section 7 and 9 of the 'I&B Code'."

10. The principal Bench of this Tribunal also in the case of M/s. Deem Roll-Tech Limited vs. M/s. R.L. Steel & Energy Limited (Company Application No. (I.B.) 24/PB/2017) (2018) 2 Comp Cas OL 644 (NCLT) has already taken the view that the period of limitation would be applicable as the claim made by the Operational Creditor was barred by limitation and therefore, it dismissed the petition. The views of the Principal Bench are evident from the following paras which read thus:

"Be that as it may on a perusal of the records available before us, particularly taking into consideration the invoices as detailed above annexed as Annexure-3 (colly) to the petition coupled with the Copy of the Ledger Account for the year 2011, 2012, 20l3 and 2014, all annexed as part of Annexure-4 (Colly), it is evident that the invoices relates to the period between February 2011 to January 2012 and the non-payment of dues is claimed to be in relation to 3 invoices as detailed above, and the last date of payment as per the ledger account for the period between 1.4.2013 to 31.3.2014 is that of 25.2.2014 where in a sum of Rs. 2,00,000/- is shown as received from the respondent and for the year ended 31.3.2014 the closing balance is disclosed to be in a sum of Rs. 5,59,660/- as due from the respondent company. For the year ended 31.3.2015 as well as 31.3.2016 the same amount figures as the closing balance due from the respondent as per the ledger accounts certified by the petitioner. The same seems to be the story for the period commencing from 1.04.2016 to 31.03.2017, as found in page number 26 of the petition. It is pertinent to note that none of the ledger accounts produced and the closing balances stated therein have been confirmed by the respondent company nor any other acknowledgements issued by the respondent produced by the petitioner. In view of the above facts we do not have any hesitation in holding that the amount claimed as a 'debt' by the petitioner, as against the respondent giving a ground for triggering the insolvency process as contemplated under IBC is time barred and hence the petition is liable to fail keeping in view the provisions of IBC as delineated hereunder:-

'Debt' is defined under section 3(11) of IBC to mean a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. 'Claim' is defined under section 3(6) of IBC as follows:

(a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured;

(b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, un-matured, disputed, undisputed, secured or unsecured;

It is also relevant to consider the definition of 'operational debt' and 'operational creditor' which seems to have given rise to the instant petition. Operational debt is defined under section 5(21) of IBC to mean a claim in respect to the provision of goods or services including employment or a debt in respect of the debt in respect of repayment of dues arising under any law for the time being in force and payable to the central government, state government or any local authority and an operational creditor is defined in section 5(20) of IBC means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred. As per section 50 of IBC this Tribunal has been designated as adjudicating authority in relation to corporate persons. Further as per clause (c) sub-Section (5) section 50, this tribunal is enjoined with the jurisdiction to entertain or dispose off any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this code. Section 255 of IBC provides that the Companies Act 2013 shall be amended in the manner specified in the eleventh schedule to IBC and a perusal of the eleventh schedule of IBC discloses the amendments made to the Companies Act 2013 of several provisions though not section 433 of the Act wherein specifically the provisions of the Limitation Act 1963 (36 of 1963) is made applicable and that it shall, as far as may be apply to the proceedings or appeals before the Tribunal or Appellate tribunal as the case may be. Hence in the absence of any specific bar in the IBC to the application of the Limitation Act, 1963 coupled with the provisions of Section 433 of the Act as contained in the Companies Act 2013 which makes Limitation Act applicable to this Tribunal the debt as claimed by the petitioner is barred by limitation and hence cannot be the basis for invoking IBC before this Tribunal".

11. Even otherwise the rule of prudence would require that public policy of law must be given effect which is widely followed namely it does not come to the rescue of those who sleep over their rights. It come to the help of those who are vigilant. The question arose before Constitution Bench of Hon'ble the Supreme Court in the case of State of Madhya Pradesh vs. Bhailal Bhai & Ors AIR 1964 SC 1006, whether any period of limitation can be implied for a litigant to file a writ petition. Their lordships of Hon'ble the Supreme Court held th

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at the maximum period of limitation prescribed for filing a writ petition cannot be more than the one prescribed for filing of a civil suit. The judgment has been followed and applied umpteen times. Obviously, the aforesaid principle of prudence has been laid down when there is no limitation prescribed in the Constitution under Article 226 or Article 32 of the Constitution. When the period of limitation was absent for filing of a writ petition, Hon'ble the Supreme Court has taken the view that the period of limitation as prescribed in the Limitation Act would be the maximum. Constitution is supreme and fundamental law of the land. All laws take guidance from the Constitution. Therefore, it is binding on all including this Tribunal. 12. In view of the above we find no ground to admit the petition as no acknowledgment before 31.01.2015 has been placed on record to extend the period of limitation beyond three years. 13. As a sequel to the above discussion, this Petition fails and the same is dismissed.