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TMI Blog2024 (2) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... ion begins is when the right to apply accrues and right to apply accrues when the invoices were to be paid. Time barred claims or not - HELD THAT:- The Limitation period begins to run from the time when the right to apply accrues i.e. limitation will be three years from when the right to apply accrues, which is over for 224 out of 234 invoices, as the due dates of these invoices, admittedly are from 2013 to 2014. In the instant case there are six projects, located in different locations, though under the same construction company viz HCCL. Most of the invoices pertain to the period of 2012 to 2014 and default dates varies from the year 2012 to 2014 in majority of the cases. Therefore, the three-year limitation period, even for the last invoice out of the 224 invoices had lapsed in September 2018, while this Company Petition was filed on 25th February, 2021. Therefore, the argument of the petitioner that for Company Appeal the limitation stood extended is not tenable. The legal tenability of running accounts has already been noted in the instant case for all the invoices together and there cannot be any better justification to settle them project wise as per Article 1 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, the Appeal is dismissed. - [ Justice Ashok Bhushan ] Chairperson , [ Mr. Barun Mitra ] Member ( Technical ) And [ Mr. Arun Baroka ] Member ( Technical ) For the Appellant : Mr. P. Nagesh , Sr. Advocate with Mr. Rajiv Malik , Ms. Pratiksha Singh , Ms. Mansi Agarwal , Mr. Akshay Sharma Mr. Vijay Agarwal , Advocates For the Respondent : Mr. Abhijeet Sinha , Sr. Advocate with Mr. Kunal Verma , Mr. Yugandhara Pawar Jha , Ms. Lavanya Dhawan , Mr. Ritik Gupta and Mr. Shivraj Pawar , Advocates JUDGMENT ( Hybrid Mode ) [ Per : Arun Baroka , Member ( Technical ) ] This is an appeal under Section 61 of the Insolvency Bankruptcy Code, 2016 (hereinafter referred to as IBC ) filed by the M/s Laxmi Trading Corporation (hereinafter referred to as LTC or Operational Creditor) M/s Hindustan Construction Company Limited (hereinafter referred to as HCCL or Corporate Debtor) against the Impugned Order dated 25.08.2023 passed by the National Company Law Tribunal, Mumbai Bench, (Adjudicating Authority) in Company Petition (IB) No. 147/MB-IV/2021 under Section 9 of the IBC, 2016. Brief facts of the Appeal relevant for the case : 2. M/s Laxmi T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aims which are within the period of limitation are below the threshold limit of Rs.1,00,00,000/- (Rupees One Crore Only) as provided under Section 4 of the Code. The claims of the Appellant that there is a running account with the Corporate Debtor and the separate ledgers referred to by the Adjudicating Authority were only for the sake of convenience of the Appellant as a ground was not raised by the Appellant before the Adjudicating Authority. This is also not contended by the Appellant in his Form-5 and more particularly in Part-IV wherein the Appellant has filed the ledger accounts for these projects as Annexures along with the Company Petition, which shows that the Appellant have been maintaining separate ledger accounts for separate projects. These projects are not only situated in different States, but the invoices raised by the Appellant on different projects are also separate. 7. Furthermore, Respondent claims that the emails of 10.11.2017 and 14.07.2017, purportedly, sent by the Respondent to the Appellant will not make Section 18 of the Limitation Act applicable in the present case as the so called acknowledgement of liability by these emails is not before the expirati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of debt are also examined simultaneously. Running account vs project wise accounts : 11. The claim of the Operational Creditors that they were having a running account between them and the Corporate Debtor needs critical scrutiny as on this basis they are claiming that the period of limitation stood extended from time to time as per Article 1 of the Limitation Act. In other words, their claim is that there is continuing cause of action that has arisen in favour of the Operational Creditor. It claims that the time stood extended till 15.03.2020 and they have filed the company petition on 19.01.2021 and also the period from 15.03.2020 till 28.02.2022 should be excluded basis the judgment of Hon ble Apex Court in Su moto writ petition No. 3/20 dated 10.01.2022. 12. Perusal of the ledger accounts produced by the Operational Creditor, particularly paper book from pages 330 to 367, indicates that ledger accounts are being maintained project wise and are not on running account basis. The Operational Creditor has been maintaining separate accounts for each project and the receipts of payments were deposited in appropriate specific project account and not in a common accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harji Gurjar Vs. Veer Gurjar Aluminium Industries (P) Ltd. has reiterated the applicability of Limitation Act and it was again reiterated that period for limitation is governed by Article 137 of the Limitation Act. In Paragraph 32 of the Judgment, following has been laid down: 32. When Section 238-A of the Code is read with the above-noted consistent decisions of this Court in Innoventive Industries, B.K. Educational Services, Swiss Ribbons, K. Sashidhar, Jignesh Shah, Vashdeo R. Bhojwani, Gaurav Hargovindbhai Dave and Sagar Sharma respectively, the following basics undoubtedly come to the fore : (a) that the Code is a beneficial legislation intended to put the corporate debtor back on its feet and is not a mere money recovery legislation; (b) that CIRP is not intended to be adversarial to the corporate debtor but is aimed at protecting the interests of the corporate debtor; (c) that intention of the Code is not to give a new lease of life to debts which are timebarred; (d) that the period of limitation for an application seeking initiation of CIRP under Section 7 of the Code is governed by Article 137 of the Limitation Act and is, therefore, three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014 23.01.2017 No T-49A 734250 2 2014 3.09.2014 3.09.2017 No Totals 15,408,672 234 Time barred claims : 15. Out of total 234 invoices, 224 invoices (i.e. towards Kashang Hydro Electric Project I, Peerpanjal Tunnel VA Rail Project, T-48A and Uri projects) aggregating to an amount of INR 1,44,03,646/- have been issued between 2012 to 2014. Each of the said invoices is stated to be payable within 30 days of the invoice. Their default dates varies sometime in the year 2012 to 2014 in majority of the cases. As such, the 224 invoices are ex-facie time barred, as the due dates of these invoices admittedly are from 2013 to 2014 and time of more than three years has lapsed in these cases. Except for 10 invoices of Peerpinjal project, for all other invoices due date of payment for last invoice is prior to 2014. Therefore, the three-year limitation period even for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore they also have to be settled as per Article 137 of the Limitation Act. The Operational Creditor has not been able to cross the hurdle of limitation and the threshold of Rupees one crore in a consolidated manner for 234 invoices claimed in his demand notice. By further subdividing the claims of 234 invoices in six different projects, the claims per project will further come down and threshold will once again be impossible to be met. Even for arguments sake if we presume that the claims are not barred by limitation, the claims of the operational creditor will fail on threshold if taken project-wise and it will not help the Applicant as the total claims will be further subdivided into six parts. Therefore, going into the project wise claims will not serve any purpose. Moreover, the total claim has to be seen, which has already been examined by us in the earlier paragraphs. We have already noted earlier that with respect to 234 invoices, which are payable within 30 days of the invoices, 224 invoices are ex-facie time barred and the remaining 10 invoices do not meet the threshold of Rs.1,00,00,000/-. Therefore, this line of argument of the operational creditor is also not tenable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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