The application for Corporate Insolvency Resolution Process was rejected as it was filed beyond the limitation period, despite acknowledgment of debt through dishonored cheques.

ORDER

[PER: SANJIV DUTT, MEMBER (TECHNICAL)]

1. BACKGROUND

1.1 This Application bearing C.P.(IB) No.960/MB/2022 was filed by High Ground Enterprise Limited, the Operational Creditor on 06.09.2022 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as “the AAA Rules”) through its Director and Authorised Representative, Mr. Sandeep R. Arora for initiating Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) in respect of Neev Infrastructure Private Limited, the Corporate Debtor.

1.2 The Operational Creditor is engaged in the business of Engineering, Procurement and Construction Management (EPCM), while the Corporate Debtor operates in the Infrastructure and Construction sector.

1.3 The Corporate Debtor awarded the work of modernisation of a canal to the Operational Creditor vide Work Order dated 02.01.2017. After completing the assigned work, the Operational Creditor raised invoices between 09.01.2017 and 24.03.2017. The Operational Creditor received part payments against its invoices. However, the Corporate Debtor failed to clear the remaining dues of the Operational Creditor.

1.4 The total amount in default, as claimed in Part-IV of the Application is Rs.5,25,80,900/- (Five Crore Twenty-Five Lakh Eighty Thousand Nine Hundred Rupees) comprising outstanding dues of Rs.4,79,19,922/- and TDS Amount of Rs.46,60,978/-, along with interest at the rate of 18% per annum for the work carried out by the Operational Creditor from January to March, 2017.

1.5 A Demand Notice dated 17.10.2019 was issued under Section 8(1) of the Code. However, the Corporate Debtor neither made the payment within 10 days of receipt of the Demand Notice nor responded to the same. Consequently, the Operational Creditor has approached this Tribunal, seeking initiation of CIRP in respect of the Corporate Debtor.

1.6 This Application was initially filed by the original management of the Operational Creditor. However, during the pendency of present Application, the Operational Creditor itself was admitted into CIRP vide order dated 17.02.2023 in C.P. (IB) No. 271/MB-IV/2021 by Court-IV, NCLT, Mumbai. Therefore, the present matter is now being pursued by the Resolution Professional (RP) of the Operational Creditor, which has also been duly recorded by this Tribunal in the Daily Order dated 25.09.2023.

2. AVERMENTS OF OPERATIONAL CREDITOR

2.1 The Corporate Debtor approached the Operational Creditor and awarded the work of modernisation of Chikkadevaraya Sagara (CDS) through Work Order No. AFIPL/FWPL/Package-2/16-17 dated 02.01.2017. Pursuant to the said Work Order, the Operational Creditor duly carried out the assigned work from January to March, 2017.

2.2 In accordance with the agreement, the Corporate Debtor assigned various works to the Operational Creditor. Upon successful completion of the said works, the Operational Creditor raised the following Tax Invoices:

2.3 The Operational Creditor received part payments of Rs.18,04,68,000/- from the Corporate Debtor, the last payment being received on 18.01.2018. The Operational Creditor maintained record of the Corporate Debtor's transactions in its Books of Account under the Party Ledger as well as the Sales Ledger. Further, the Corporate Debtor is liable to deposit the TDS amount of Rs.46,60,978/- against the pending invoices with the statutory authorities. The Corporate Debtor, while unequivocally acknowledging and admitting the net liability (excluding TDS), issued two post-dated cheques bearing Cheque No.483296 dated 05.07.2018 for Rs.46,60,978/- and Cheque No.483295 dated 20.07.2018 for Rs.4,32,58,944/-.

2.4 However, both cheques were dishonored due to “