9911796707
TMI Blog2020 (6) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... 137 of the Limitation Act, 1963 - there can be no hesitation in holding that the application filed by the 'Operational Creditor' under Section 9 of the 'I B Code' was barred by limitation. Whether issuance of six cheques by the 'Corporate Debtor' towards the part payments of the outstanding operational debt would amount to an acknowledgment of debt thereby giving fresh lease of life to the claim of 'Operational Creditor' qua such operational debt? - HELD THAT:- In respect of the invoices raised in the year 2013 the prescribed period of limitation being three years in terms of Article 137 of the Limitation Act, 1963 expired in the year 2016 and the issuance of cheques by the 'Corporate Debtor' in the year 2017 being well beyond the prescribed period of three years would not be construed as an acknowledgment in writing within the prescribed period of limitation in terms of Section 18 of the Limitation Act, 1963. The situation would have been different if such cheques issued by the 'Corporate Debtor' towards the part payment of the operational debt had been issued prior to 7th October, 2016 as the date of default occurred on 7th Octo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics in respect whereof bills were raised from time to time which were cleared by the 'Corporate Debtor' without raising any dispute in regard to the quality of the products supplied by the 'Operational Creditor'. However, since August, 2013, the 'Corporate Debtor' started making irregular payments and the bills were not cleared in time. As the 'Operational Creditor' raised issue regarding payments with the 'Corporate Debtor', in the year 2015, the 'Corporate Debtor' issued signed cheques as security, but since no payment was forthcoming, 'Operational Creditor' was constrained to issue Demand Notice under Section 8 of the 'I B Code' calling upon the 'Corporate Debtor' to pay aggregate amount of ₹ 43,96,593/- towards bills raised from 11th August, 2013 to 2nd September, 2013 amounting to ₹ 21,08,821/- plus interest of ₹ 22,87,772/-. Demand Notice dated 19th March, 2018 was duly delivered at the registered office of the 'Corporate Debtor' but the 'Corporate Debtor' chose not to reply the same, thereby prompting the 'Operational Creditor' to approach the Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice nor raised any dispute in regard to supply or quality of goods as the Demand Notice was not at all responded to by the 'Corporate Debtor'. 5. Having heard learned counsel for the parties and fathomed through the records, we find that the appeal bears merit for the reasons we would be adverting to. 6. It is the settled proposition of law that an application under Section 9 of the 'I B Code' is governed by Article 137 of the Limitation Act, 1963, which is reproduced hereunder: Part II-OTHER APPLICATION Description of application Period of Limitation Time from which period begins to run When the right to apply accrues 137. Any other application for which no period of limitation is provided elsewhere in this division. Three years The period prescribed under this Article being three years, the 'Operational Creditor' is required to satisfy the Adjudicating Authority that the 'Corporate Insolvency Resolution Process' is sought to be initiated by filing application within the prescribed period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry clause engrafted under Article 137 of the Limitation Act, 1963. Viewed thus, there can be no hesitation in holding that the application filed by the 'Operational Creditor' under Section 9 of the 'I B Code' was barred by limitation. 10. The next question arising for attention is whether issuance of six cheques by the 'Corporate Debtor' towards the part payments of the outstanding operational debt would amount to an acknowledgment of debt thereby giving fresh lease of life to the claim of 'Operational Creditor' qua such operational debt. On this issue, it would be appropriate to notice that the general principle embodied in Section 3 of the Limitation Act, 1963 providing that every suit, appeal or application filed after the prescribed period of limitation shall be dismissed irrespective of the fact that limitation has not been set up as a defence is subject to the provisions contained in Sections 4 to 24 (inclusive) of the Limitation Act, 1963. These Sections carve out exceptions by providing exclusion and extension on various grounds enumerated therein. 11. Section 18 of the Limitation Act, 1963 deals with effect of acknowledgment in writin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for such suit or application in respect of such right. Applying the dictum of this provision in the facts and circumstances of instant case, it is manifestly clear that in respect of the invoices raised in the year 2013 the prescribed period of limitation being three years in terms of Article 137 of the Limitation Act, 1963 expired in the year 2016 and the issuance of cheques by the 'Corporate Debtor' in the year 2017 being well beyond the prescribed period of three years would not be construed as an acknowledgment in writing within the prescribed period of limitation in terms of Section 18 of the Limitation Act, 1963. The situation would have been different if such cheques issued by the 'Corporate Debtor' towards the part payment of the operational debt had been issued prior to 7th October, 2016 as the date of default occurred on 7th October, 2013 which fact is admitted by the 'Operational Creditor' in Form 5 (Page 46 of the Appeal paper book). 13. In this factual background and on the very basis of what was placed by the 'Operational Creditor' before the Adjudicating Authority, issuance of six cheques dated 5th December, 2017 by the 'Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
