Ahio Overseas Llp vs Gokal Iron And Hardware Traders (Ldh)

Ahio Overseas LLP ...Appellant(s)

Versus

Gokal Iron & Hardware Traders (LDH) ...Respondent(s) Present: For Appellant : Ms. Harsheen M. Palli, Advocate. For Respondents : None

ORDER

(Hybrid Mode) [Per: Justice Rakesh Kumar Jain, (Oral)

16.09.2025: This appeal is filed by the Corporate Debtor, assailing the

order dated 09.09.2024, passed by the National Company Law Tribunal,

Chandigarh Bench, Chandigarh by which CP (IB) No. 168/Chd/Pb/2021,

filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by

Operational Creditor, namely, M/s Gokul Iron and Hardware Traders (LDH)

for resolution of the amount in default of Rs. 1,71,28,172/- which includes

Principal Amount of Rs. 84,88,307/- and interest calculated from

09.11.2016 to 30.06.2020 at Rs. 86,39,865/-, has been admitted.

2. At the outset, Counsel for the appellant has submitted that

application filed under Section 9 by the OC/Respondent was beyond the

period of limitation, therefore, it should have been dismissed by the Ld.

Tribunal. In this regard, she has submitted that the demand notice was issued by the Operational Creditor on 30.06.2020 and the application under

Section 9 was filed on 06.05.2021 in which the date of default has been

mentioned as 30.11.2018.

3. Counsel for the appellant has submitted that the Tribunal has

observed in para 10 of the impugned order that the period of limitation

would begin from the date of default on 30.11.2018 i.e. when the last credit

was issued to the CD vide bill no. G-9 dated 29.11.2018.

4. Counsel for the appellant has argued that the Tribunal has referred to

the invoice bill no. G-9 dated 29.11.2018 which was raised by the CD for an

amount of Rs. 9,67,619/- in regard to sale of polyester filament yarn

whereas the last invoice no. 287 by the operational creditor is dated

07.11.2016 which is pertaining to the sale of 2/23 NE Acrylic Yarn Grey for

a sum of Rs. 5,58,810/-.

5. It is submitted that this fact establishes that the invoice dated

07.11.2016 is the last invoice because the Operational Creditor has

calculated interest on the outstanding amount from 09.11.2016 (date of last

invoice) till 30.06.2020 (date of issuance of notice under Section 8).

6. Counsel for the appellant has further argued that in a case where

both the parties are selling their goods to each other, the limitation would

not be counted in terms of Article 1 of the Limitation Act, 1963 (for short

'the act') but it has to be counted in terms of Article 137 of the Act. In this

regard she has relied upon a decision of this court rendered in the case of

Laxmi Trading Corporation vs. Hindustan Construction Company Ltd.,

2024 SCC Online NCLAT 282 to contend that in the cited case the similar controversy was involved and this court has held that instead of Article 1,

Article 137 of the Act shall apply.

7. She has submitted that the Tribunal has committed an error in

considering acknowledgment on the part of the appellant on the analogy

that the goods were sold by the CD to the OC vide invoice G-9 dated

29.11.2018 on credit.

8. It is submitted that if the limitation is counted from 07.11.2016 then

the application, having been filed on 06.05.2021, is clearly barred by

limitation as the period prescribed under Article 137 of the Act is only 3

years which cannot be extended.

9. She has further submitted that the Tribunal has further erred in not

appreciating the fact that the Operational Creditor did not cross the

threshold of Rs. 1 Crore as provided under Section 4 of the Code because

the Principal amount claimed is Rs. 84,88,307/- which is less than Rs. 1

crore and the operational creditor is not entitled to any amount of interest

because neither it was agreed by the parties nor there is any evidence on

record about the rate of interest which has been charged. In this regard, she

has relied upon a decision of this court in the case of Jai Narain Fabtech

Pvt. Ltd. vs. Cheema Spintex Ltd., CA (AT) (Ins) No. 1515 of 2023

decided on 04.04.2025.

10. It is submitted that the interest mentioned in the invoice is a

unilateral act on the part of the OC on the basis of which it cannot be

charged until and unless it has been agreed upon by the CD in writing or

otherwise.

11. No one has appeared on behalf of the Respondent. We make it clear

that this case was listed yesterday i.e. 15.09.2025, but as the court time

was over, therefore, on the earnest request of the appellant, the case was

kept for today i.e. 16.09.2025 at no. 1. Counsel for the Respondent was

present on 15.09.2025 but today no one has put in appearance on behalf of

the Respondent.

12. We have heard Ld. Counsel for the appellant and perused the record

with her able assistance.

13. In so far as the issue of limitation is concerned, the residuary

provision of Article 137 of the act shall apply to the application filed under

Section 7, 9 and 10 of the Code. Article 137 of the Act provides that the

limitation shall be of 3 years when the right to apply would accrue. Article

137 is reproduced as under:

Description of suit Period of limitation Time from which period begins to run

137.Any other application Three years When the right to apply for which no period of accrues.

limitation is provided elsewhere in this Division.

14. The application under Section 9 was filed on the basis of the last

invoice no. 287 dated 07.11.2016, therefore, the default had occurred on

07.11.2016, if the amount was not paid but the invoice issued by the CD on

29.11.2018 regarding the goods sold by to the OC cannot be made the basis

for the date of default for filing the application within the period of three

years.

15. There is another aspect of the matter as to whether Article 1 of the Act

would apply or Article 137 of the Act. In this regard, Article 1 of the Act is

also relevant to be referred to which is reproduced as under:

Description of suit Period of limitation Time from which period begins to run

1.For the balance due on Three years The close of the year in a mutual, open and which the last item current account, where admitted or proved is there have been entered in the account;

reciprocal demands such year to be between the parties. computed as in the account.

16. Since the parties to the lis were selling goods to each other by raising

invoices, therefore, it could be for the sake of argument presumed, that

there was a running account between them regarding the goods being sold

to each other. However, this court, in the case of Laxmi Trading Corporation

(supra), has clearly held that the proceedings under Section 9 of the IBC,

2016 cannot be said to be suit relating to accounts and thus Article 1 of the

Act is not applicable rather the period of limitation for application under

Section 9 of the IBC, shall be governed by Article 137 of the Act.

17. It is also pertinent to mention that in Article 1 and Article 137 of the

act the triggering point for counting the limitation is different. In so far as

Article 137 is concerned, the triggering point is the date when the right to

apply accrued. In the present case the right to apply accrued to the

operational creditor on 07.11.2016 and not the date when the CD raised his

own invoice for the payment of the sold goods by it.

18. Thus, in our considered opinion, the Tribunal has committed an error

in holding that the application filed under Section 9 was within the period of

Limitation.

19. It is also argued by the CD that the application itself was not

maintainable as it was not crossing the threshold. It has been mentioned in

the application itself that the Principal amount of Rs. 84,88,307/- is less

than the threshold of Rs. 1 Crore but if the component of interest is also

added to it then it will cross the threshold. However, the question is as to

whether the interest can be added to the Principal amount until and unless

there is an agreement between the parties on delayed payment or not?

20. The Ld. Tribunal has believed the OC that the rate of interest was 18%

and allowed the amount of Rs. 86,39,865/- to be added to the outstanding

Principal amount whereas there is no evidence brought on record by the OC

that the parties had agreed to the payment of any kind of interest in case of

delay in payment of the principal amount.

21. The tribunal also cannot rely upon the condition mentioned in the

invoice qua the payment of interest because firstly, the interest, mentioned

in the invoice by the OC is 36% whereas in the notice it has been mentioned

as 18% and secondly, there is no evidence that interest mentioned in the

invoice was ever agreed to by the CD. In this regard, decision, in the case of

Jai Narain Fabtech Pvt. Ltd. (supra) shall come to the rescue of the appellant

and the decision relied upon by the Tribunal in the case of Mr. Prashant

Kumar Agarwal vs. Vikash Parasrampuria, CA (AT) (Ins) No. 690 of

2022 is not applicable.

22. Thus, looking from any angle, the order passed by the Tribunal is

erroneous and thus the impugned order is hereby set aside. The appeal is

allowed. Parties shall bear their own costs. IA's if any are pending are hereby

closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Naresh Salecha] Member (Technical) sr/rr