The NCLAT restored the application for the Corporate Insolvency Resolution Process (CIRP) after determining that the payment made by the Corporate Debtor extended the limitation period.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench led by Justice Rakesh Kumar Jain (Judicial Member) and Technical Members Mr. Naresh Salecha and Mr. Indevar Pandey reviewed an appeal and held that a payment made by the corporate debtor within the limitation period triggers the revival of the limitation under Section 19 of the Limitation Act, 1963, making the creditor’s Section 9 application timely if filed within three years from the date of such payment.
The NCLAT allowed the appeal challenging the dismissal of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, by the NCLT, Cuttack Bench. The original application sought to initiate the Corporate Insolvency Resolution Process (CIRP) against Sidhartha Construction and Trading Pvt. Ltd. The NCLT had dismissed the petition on the grounds of limitation, holding that the default dated back to 06.05.2015, and the application filed on 01.11.2019 was time-barred.
The appellant argued that the payment of ₹2 lakhs made by the corporate debtor on 22.11.2016 extended the limitation period under Section 19 of the Limitation Act, 1963. The appellant contended that since the payment revived the limitation period, the three-year period ended on 22.11.2019, making the filing on 01.11.2019 within the permissible timeframe.
The respondent has proceeded ex-parte, and no further participation was made on their behalf. After examining the appellant’s arguments and the relevant documents, including the ledger, the NCLAT found merit in the claim. It ruled that the payment on 22.11.2016 effectively restarted the limitation period, making the Section 9 application timely.
The NCLAT set aside the NCLT's order and restored the original application under Section 9, remanding the case to the NCLT, Cuttack Bench, for a fresh decision. The parties were directed to appear before the NCLT on 30.09.2024 for further proceedings.
Mr. Dhananjay Bhaskar Ray, Advocate represented the Appellant.
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