The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising of Justice Ashok Bhushan, Chairperson and Dr. Alok Srivastava, Technical Member held that the Article 1 of Limitation Act, 1963 is not applicable to the Petition filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016.
In the present case, the Appellant has placed reliance on Article 1 of the Limitation Act. A similar provision akin to Article 1 of the Limitation Act came for consideration before the Supreme Court in the Hindustan Forest Company case. Article 1 is in Part-I of the Schedule of the Limitation Act dealing with suits, under the ‘suit relating to accounts’. The Application filed under Section 9 of Insolvency and Bankruptcy Code, 2016 by the Appellant cannot be said to be a suit relating to accounts.
The contents of the Application under Section 9 had been brought on record. The Ledger of Operational Creditor had also been brought on record including the Bank Statement which clearly mentioned that the last payment received by the Appellant was on 26th September, 2016. From the last payment, the application could have been filed within three years.
Application under Section 9 filed by the Appellant was on the basis of 174 invoices as has been noticed by the Adjudicating Authority in the Impugned Order. The Appellate Authority were satisfied that for the limitation for filing Section 9 application it is Article 137 of the Limitation Act, 1963 which was attracted. Under Article 137, the time from which the period begins to run is ‘when the right to apply accrues’ the right to apply accrues when invoices issued by the Appellant to the Corporate Debtor were not paid. Invoices on the basis of which payment is claimed were more than three years earlier than the date of filing of Section 9 Application which was the basis for rejection of the Application of the Appellant by the Adjudicating Authority.
The Appellate Authority was not persuaded by the submissions of Counsel for the Appellant that present is the case where Article 1 was applicable and limitation should be counted from 31st March, 2017.
The Appellate Authority observed, “Article 1 of Limitation Act deals with suits relation to accounts, and an Application under Section 9 of the Code cannot be said to be a suit relating to accounts. Whereas the limitation as per Article 137 will begin to run from the date when the right to apply accrues in case of Application filed under section 9 of the Code.”
The Application was filed on the basis of 174 invoices and all invoices being prior to much before three years period from the filing of Section 9 Application, the Adjudicating Authority had rightly rejected the Application. There was no merit found in the Appeal, and the Appeal was dismissed.
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