M/S Jay Carline Pressing Pvt Ltd vs M/S Carline Pressings Pvt Ltd
- CitationCompany Appeal (AT) (Ins.) No. 263 of 2020
Ratio decidendi
The rule this decision rests on
Where a debtor, after the limitation period for a claim has expired, makes a written acknowledgment of the debt and admits its liability by a settlement executed before the period has run out... no, that is not the holding here: the settlement of 15.02.2018 was executed after the limitation period had expired on 08.04.2016, and the court proceeds on that basis. Where a debt has become time-barred and the debtor thereafter enters into a settlement by which it admits liability for the amount involved, the admission is a fresh contract or promise within the meaning of Section 25(3) of the Indian Contract Act, 1872, and the limitation for a claim on that debt begins afresh from the date of the settlement. An application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed within the period running from the date of such settlement is within limitation, notwithstanding that it was filed well after the period under Article 137 of the Limitation Act, 1963 had expired on the original cause of action.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Jay Ganesh Plating Works ...Appellant
Versus
Carline Pressings Pvt. Ltd. ...Respondent
Present:
For Appellant: Ms. Pratiksha Sharma, Mr. Ankit Acharya, Advocates For Respondents: Mr. Gautam Singh, Advocate
ORDER
06.09.2022: This appeal is directed against the order dated 19.12.2019
passed by the National Company Law Tribunal, Mumbai Bench, Court No. IV,
dismissing an application filed under Section 9 of the Insolvency and
Bankruptcy Code, 2019 (Code) by the Appellant on the ground of being barred
by limitation.
2. Shorn of unnecessary details, Counsel for the Appellant has submitted
that the application under Section 9 of the Code was filed on 22.07.2019
whereas the last invoice was dated 08.04.2013. It is submitted that though
the period of limitation to prefer the application had expired in terms of Article
137 of the Limitation Act, 1963 (the 'Act of 1963') but the time barred of debt
of the Appellant was made good by the Respondent by entering into a
settlement on 15.02.2018. It is, thus, submitted that the period of limitation had started again from 15.02.2018 in terms of Section 25(3) of the Contract
Act, 1872 (the 'Act').
3. Counsel for Respondent has fairly conceded about entering into
settlement dated 15.02.2018 which is part of record. Counsel for Respondent
has though argued vehemently in support of the impugned order passed by
the Tribunal but he could not deny the fact of execution of the settlement
dated 15.02.2018 as per which the Respondent had admitted its liability of
the amount involved towards the Appellant.
4. We have heard Counsel for the parties and perused the record with
their able assistance.
5. From the resume of the facts, it is apparent that the claim set up by
the Appellant is on the basis of the last invoice dated 08.04.2013, the
application filed under Section 9 on 22.07.2019 was barred by limitation as
the period of three years provided in the residuary Article 137 of the Act of
1963 had expired on 08.04.2016. However, the time barred debt was again
admitted by the Respondent by way of a settlement dated 15.02.2018 and in
view of Section 25(3) of the Act, the limitation had again started from the said
date and thus, the application filed under Section 9 of the Code on
22.07.2019 is well within limitation.
6. No other point has been raised.
7. In view of the aforesaid discussion, the present appeal is hereby allowed
and the impugned order is set aside. The matter is remanded back to the Ld.
Tribunal to consider the application filed under Section 9 of the Code by the
Appellant to be within limitation and decide the same in accordance with law.
8. The parties are directed to appear before the concerned Tribunal on
23rd September, 2022.
[Justice Rakesh Kumar Jain] Member (Judicial)
[Mr. Kanthi Narahari] Member (Technical)
[Dr. Alok Srivastava] Member (Technical)
SC/RR
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