Praveen Mangilal Jain Managing Partner ... vs Elecon Energy Solutions Private ...

(Arising out of order dated 08.10.2024 passed by the National Company Law Tribunal, Mumbai Bench, in Company Petition (IB) No. C.P. (IB)/25(MB)2023)

In the matter of:

Praveen Mangilal Jain Managing Partner, M/s Vardhman Cables and Conductors Having its Registered Office at: 129/C, Shinoli B.K. Tal, Chandgad Kolhapur, Maharashtra- 416507 ...Appellant

Vs.

M/s. Elecon Energy Solutions Pvt. Ltd. Having its Registered Office At: 110, Building No.2, Sector No.2 Millenium Business Park, Mahape, Navi Mumbai -4000710 ...Respondent Present: For Appellant: Mr. Mayank Sapre and Mr. Dheeraj Kumar, Advocates.

For Respondents: Mr. Abhishek Samant, Advocate.

J U D G M EN T (07th October, 2026)

Indevar Pandey, Member (T)

This Appeal has been preferred under Section 61(1) of the Insolvency

and Bankruptcy Code, 2016 (hereinafter referred to as "Code") by the Appellant/Operational Creditor assailing the order dated 08.10.2024 passed

by the National Company Law Tribunal, Mumbai Bench ("Adjudicating

Authority") in C.P. (IB)/25(MB)2023, whereby the application filed by the

Appellant under Section 9 of the Code was dismissed at the threshold on the

ground of limitation. The Appellant contends that the Adjudicating Authority

erred in treating 02.10.2018, being the date of the first invoice, as the date of

default for the entire claim, without considering that the claim arose from 13

separate invoices issued between 02.10.2018 and 09.06.2020 and that the

dates of default in respect of the individual invoices were distinct. The

Appellant contends that the impugned order is cryptic and non-speaking and

has resulted in erroneous dismissal of the Section 9 application on the ground

of limitation.

Brief Facts of the Case

2. The brief facts of the case relevant to this appeal are given below:

i) The Appellant (M/s Vardhman Cables and Conductors) is a

company incorporated under the Companies Act, 1956 and is

engaged in the business of manufacturing cables and conductors.

the Respondent (M/s Eleccon Energy Solutions Pvt. Ltd.) is the

Corporate Debtor, which is engaged in the business of electrical

infrastructure development and power distribution systems.

ii) On 21.03.2017, the Appellant, along with its Joint Venture

Company, M/s S.M. Electric Works, was awarded a Letter of Award

for execution of works under the Integrated Power Development

Page 2 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 Scheme ("IPDS") Part-II pursuant to Tender No. IP-232 of MSEDCL,

Kalyan Rural Zone. In the year 2019, the Appellant and its Joint

Venture appointed the Respondent as a subcontractor for execution

of the assigned work.

iii) In the course of the contractual relationship, the Respondent placed

Purchase Orders upon the Appellant for supply of cables and

conductors, pursuant to which the Appellant raised 13 invoices

during the period from 02.10.2018 to 09.06.2020. The aggregate

value of the invoices was stated to be Rs. 1,86,56,489/-, exclusive

of interest. According to the Appellant, the materials covered by the

invoices were supplied to and received by the Respondent, and the

invoices stipulated payment within 45 days from receipt of the

materials, with interest being payable in case of delayed payment.

iv) Thereafter, the Appellant issued a demand notice under Section 8

of the Code on 18.08.2022, claiming an amount of Rs.

1,86,56,489/- towards the principal outstanding, together with

interest of Rs. 1,18,66,208/-, aggregating to Rs. 3,05,22,697/-. The

Respondent submitted its reply to the demand notice on

15.09.2022, to which the Appellant filed a rejoinder dated

22.09.2022.

v) Subsequently, on 17.11.2022, the Appellant filed an Application

under Section 9 of the Code before the Ld. Adjudicating Authority,

being CP (IB) No. 25 of 2023, seeking initiation of Corporate

Insolvency Resolution Process against the Respondent in respect of

the alleged operational debt.

Page 3 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 vi) During the proceedings, the Ld. Adjudicating Authority sought

clarification from the Appellant regarding, inter alia, the date of

default, limitation and legibility of the invoices relied upon. The

Appellant initially referred to 02.10.2018 as the date of default and

thereafter, by way of additional affidavits, sought to clarify that the

relevant date of default was 09.06.2020, being the date of the last

invoice. The Appellant also placed reliance upon the exclusion of the

period from 15.03.2020 to 28.02.2022 for computation of limitation.

vii) After considering the pleadings and material placed on record, the

Ld. Adjudicating Authority, vide order dated 08.10.2024, dismissed

the Section 9 Application holding that the claim was barred by

limitation. The Ld. Adjudicating Authority proceeded on the basis of

the date of cause of action/default as 02.12.2018 and held that the

period of three years had expired before the filing of the Section 9

Application on 17.11.2022. Aggrieved by the impugned order, the

Appellant has preferred this appeal.

Submissions on behalf of the Appellant

3. Ld. Counsel submitted that the present Appeal principally concerns the

manner in which the issue of limitation was considered by the Ld.

Adjudicating Authority, while dismissing the Section 9 Application. It was

submitted that the Ld. Adjudicating Authority had, during the pendency of

the proceedings, specifically directed the Appellant to clarify the issue of

limitation and had permitted the filing of an additional affidavit for that

purpose.

Page 4 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 4. It was submitted that two of the three additional affidavits placed on

record were filed pursuant to specific orders of the Ld. Adjudicating Authority.

The Additional Affidavit dated 13.02.2024 was filed pursuant to the order

dated 17.01.2024, whereby the Appellant was directed to place legible and

proper documents on record. Thereafter, by order dated 19.07.2024, the Ld.

Adjudicating Authority granted Appellant one week's time to clarify the issue

of limitation by way of an additional affidavit, pursuant to which the

Additional Affidavit dated 09.08.2024 was filed.

5. Ld. Counsel further submitted that, notwithstanding the aforesaid

orders and the additional affidavit filed pursuant thereto, the Impugned Order

dated 08.10.2024 does not advert to the orders passed by the Ld. Adjudicating

Authority or to the aspect of computation of limitation as it was furnished by

the Appellant in the Additional Affidavit dated 09.08.2024. The Ld.

Adjudicating Authority exclusively proceeded on the basis that because the

cause of action arose on 02.12.2018 and held that since the three-year period

expired on 02.12.2021, resulting in filing of Section 9 Application filed on

17.11.2022, being barred by limitation.

6. The Appellant contended that while arriving at the aforesaid conclusion,

the Ld. Adjudicating Authority failed to give effect to the period directed to be

excluded by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil)

No. 3 of 2020. Reliance was placed upon the order dated 10.01.2022,

whereby the period from 15.03.2020 to 28.02.2022 was directed to be

excluded for the purposes of limitation in respect of judicial and quasi-judicial

proceedings. It was submitted that the balance period of limitation available

Page 5 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 as on 03.10.2021 was to become available from 01.03.2022 and, where such

balance period exceeded 90 days, the longer period was to apply.

7. Ld. Counsel submitted that even if 02.12.2018, as stated in Part-IV of

the Section 9 Application, is taken as the date of default, the claim would still

remain within limitation, after giving effect to the exclusion directed by the

Hon'ble Supreme Court. According to the computation placed on record in the

Additional Affidavit dated 09.08.2024, 469 days had elapsed between

02.12.2018 and 14.03.2020, leaving a balance of 626 days. Upon

recommencement of limitation from 01.03.2022, the said period would expire

only on 17.11.2023, whereas the Section 9 Application was instituted on

17.11.2022. It was therefore submitted that the Application could not have

been dismissed as barred by limitation.

8. He further submits that the Appellant was not seeking to alter or

substitute the date of default mentioned in Part-IV of the Application. Part-IV

specifically records 02.12.2018 as the date from which default commenced,

with reference to the first invoice dated 02.10.2018. The Appellant's case,

therefore, was that the said date itself, when correctly computed after giving

effect to the exclusion of the limitation period directed by the Hon'ble Supreme

Court, was sufficient to sustain the Application as being within limitation.

9. It was submitted that the thirteen invoices were issued on different

dates and carried their respective credit periods. Consequently, each invoice

had its corresponding due date, with the last invoice becoming due on

08.08.2020. According to the Appellant, if the computation of limitation is

taken on the earliest date of default was adopted, without prejudice to the

Page 6 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 Appellant's contention that the subsequent invoices would, in any event, have

a later limitation period.

10. Ld. Counsel further submitted that the objection raised by the

Respondent regarding the absence of a formal amendment to Part-IV of the

Application was misconceived. Since, the Appellant was not relying upon a

substituted date of default and was proceeding on the date already disclosed

in the application no formal amendment was required in Part-IV of the

Application. Reliance was placed upon the judgment of the Hon'ble Supreme

Court in Ramesh Kymal v. Siemens Gamesa Renewable Power Pvt. Ltd.,

(2021) 3 SCC 224, to contend that an applicant is required to proceed on the

basis of the date of default disclosed by it. It was submitted that the facts of

Ramdas Dutta v. IDBI Bank Ltd., Company Appeal (AT) (Ins.) No. 1285 of

2022, were distinguishable, as in that case the date of default had not at all

been mentioned in Part-IV, whereas in the present case the date of default

was specifically stated.

11. Ld. Counsel submits that the additional affidavits could validly be taken

into consideration, particularly as the same were filed with the leave and

pursuant to the directions of the Ld. Adjudicating Authority before admission

of the Section 9 Application. In this regard, reliance was placed upon Ramdas

Dutta, wherein the filing of a supplementary affidavit, permitted by the

Adjudicating Authority in the circumstances of that case, was not

disapproved.

12. He submits that the first eight invoices had fallen due on or before

11.03.2020 and, therefore, the defaults relating thereto were prior to the cut-

Page 7 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 off date prescribed under Section 10A of the Code. It was submitted that the

Explanation to Section 10A expressly excludes defaults committed prior to

25.03.2020 from the operation of the said provision.

13. He further submits that, in respect of the said eight invoices, the invoice

amount was Rs. 86,52,817/-, while interest calculated at 24% per annum up

to 31.07.2022 amounted to Rs. 70,94,646/-, making the aggregate claim Rs.

1,57,47,463/-. According to the Appellant, the contractual interest stipulated

in the invoices forms part of the operational debt and, consequently, the claim

in respect of the said invoices was above the threshold prescribed under

Section 4 of the Code.

14. Ld. Counsel, however, submitted that the Appellant was not inviting

this Tribunal to undertake an adjudication upon the underlying debt, default

or the dispute raised by the Respondent. According to the Appellant, the Ld.

Adjudicating Authority had dismissed the Section 9 Application solely on the

ground of limitation and had not returned any finding on the existence of

debt, default or pre-existing dispute. The limited prayer, therefore, was that

the finding on limitation be set aside and the matter be remitted to the Ld.

Adjudicating Authority for consideration of the Section 9 Application on

merits in accordance with law.

15. On the aforesaid submissions, Ld. Counsel for the Appellant prayed

that the Impugned Order dated 08.10.2024 be set aside, the Section 9

Application be held to be within limitation, and C.P. (IB)/25(MB)2023 be

restored to the file of the Ld. Adjudicating Authority for adjudication on the

remaining issues in accordance with law.

Page 8 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 Submissions of the Respondent

16. Ld. Counsel for the Respondent submits that the Ld. Adjudicating

Authority has rightly dismissed the Section 9 Application by order dated

08.10.2024, having found the same to be barred by limitation. It was

submitted that the Appellant, in its original Section 9 Application, had

categorically disclosed 02.12.2018 as the date of default. The said disclosure,

according to the Respondent, cannot subsequently be altered so as to

overcome the bar of limitation. The Respondent's submissions are also

reflected in the written submissions placed on record.

17. Ld. Counsel submits that the Appellant, after filing the Section 9

Application, sought to rely upon subsequent affidavits to shift the alleged date

of default from 02.12.2018 to 09.06.2020. It was contended that the date of

default is fundamental to an Application under Section 9 of the Code, since

limitation is computed from the date of default. A subsequent invoice,

correspondence or accounting entry cannot, by itself, furnish a fresh cause of

action once limitation has commenced.

18. Respondent placed reliance upon the judgment of the Hon'ble Supreme

Court in Ramesh Kymal v. Siemens Gamesa Renewable Power Pvt. Ltd.,

(2021) 3 SCC 224, wherein the Hon'ble Supreme Court proceeded on the

basis of the date of default disclosed by the Appellant in the statutory

proceedings and rejected an attempt to rely upon an earlier date. According

to the Respondent, the principle emerging from the said judgment is that a

party cannot subsequently alter the date of default disclosed in the statutory

Page 9 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 pleadings for the purpose of bringing the proceedings within the prescribed

period of limitation.

19. It was further submitted that the aforesaid principle has been followed

by this Tribunal in Ramdas Dutta v. IDBI Bank Ltd., Company Appeal (AT)

(Ins.) No. 1285 of 2022. The Respondent contended that limitation under

the Code commences from the date on which the default occurs and not from

any subsequent date sought to be relied upon by the creditor. It was

submitted that the Appellant, having specifically pleaded 02.12.2018 as the

date of default, cannot now seek to re-characterise the default for the purpose

of limitation.

20. Ld. Counsel further pointed out that even the Additional Affidavit dated

09.08.2024, upon which the Appellant now places reliance, records

02.12.2018 as the date of alleged default. It was therefore contended that the

Appellant's own pleadings and subsequent affidavit are consistent in

recognising 02.12.2018 as the relevant date. The Respondent submitted that

the Appellant cannot simultaneously rely upon the said date for one purpose

and contend for a different date at the appellate stage. Such an approach,

according to the Respondent, amounts to approbation and reprobation and

cannot be permitted.

21. Ld. Counsel also disputed the Appellant's contention that the Ld.

Adjudicating Authority had directed it to alter the date of default. It was

submitted that the order dated 16.10.2023 merely required the Appellant to

furnish a clear statement of the invoices with complete particulars.

Thereafter, the order dated 17.01.2024 permitted the Appellant to place

Page 10 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 legible and proper documents on record. The subsequent order dated

19.07.2024 granted one week's time to the Operational Creditor to clarify the

issue of limitation by filing an additional affidavit. According to the

Respondent, none of these orders authorised the Appellant to amend or

substitute the date of default pleaded in Part-IV of the Section 9 Application.

22. It was submitted that the first Additional Affidavit dated 27.09.2023

was filed by the Appellant before the subsequent affidavits and, according to

the Respondent, constituted an attempt to alter the original case regarding

the date of default. The Respondent contended that a clarification affidavit

cannot be used as a device to materially improve or alter the foundational

pleadings, particularly where such alteration directly affects the

maintainability of the proceedings on the ground of limitation.

23. Ld. Counsel further submitted that the Appellant's reliance upon the

orders passed by the Hon'ble Supreme Court in Suo Motu Writ Petition

(Civil) No. 3 of 2020 does not assist its case. It was submitted that the

limitation period, computed from 02.12.2018, expired on 02.12.2021.

According to the Respondent, the case therefore falls within the situation

contemplated by paragraph 5(III) of the order dated 10.01.2022, where the

limitation would have expired during the period from 15.03.2020 to

28.02.2022. In such circumstances, the Respondent contended that the

benefit available was a period of 90 days from 01.03.2022, which expired on

01.06.2022. The Section 9 Application having been filed only on 17.11.2022,

it was submitted that the Application remained barred by limitation even after

applying the benefit of the orders passed in the Suo Motu proceedings.

Page 11 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 24. Respondent submits that the Section 9 Application was also not

maintainable on account of the existence of a pre-existing dispute between

the parties. It was submitted that the Respondent had, prior to issuance of

the demand notice under Section 8, raised disputes regarding the amounts

claimed by the Appellant and that the correspondence exchanged between the

parties demonstrated the existence of such dispute. Reliance was placed upon

Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC

353, to contend that where a plausible dispute requiring investigation exists

prior to the issuance of the demand notice, the insolvency jurisdiction under

Section 9 cannot be invoked as a mechanism for recovery of a disputed debt.

25. It is also submitted, without prejudice, that part of the claim relied upon

by the Appellant relates to invoices issued during the period covered by

Section 10A of the Code. It was contended that the invoices dated between

05.05.2020 and 09.06.2020 relate to the period during which the statutory

prohibition contained in Section 10A operated. Consequently, according to

the Respondent, the Appellant cannot rely upon such defaults for initiation of

CIRP under Section 9 of the Code.

26. In view of the aforesaid submissions, Ld. Counsel for the Respondent

submits that the Appellant has failed to demonstrate any error in the finding

recorded by the Ld. Adjudicating Authority on limitation. It was contended

that the date of default disclosed in the original Section 9 Application remains

02.12.2018, and the subsequent attempt to rely upon a later date is

impermissible. The Respondent, therefore, prayed that the Appeal be

Page 12 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 dismissed and the order dated 08.10.2024 passed by the Ld. Adjudicating

Authority be affirmed.

ANALYSIS AND FINDINGS

27. We heard the Ld. Counsel for the parties and gone through the

documents on record.

28. Ld. Adjudicating Authority has disposed of the C.P.(IB)/25(MB)2023

vide the impugned order dated 08.10.2024 solely on the ground of Limitation.

The impugned order is extracted below:-

"ORDER SHEET OF THE HEARING HELD ON 08.10.2024

NAME OF THE PARTIES: Praveen Mangilal Jain Managing Partner Vardhman Cables And Conductors Vs. Elecon Energy Solutions Private Limited

SECTION: 9 OF THE INSOLVENCY AND BANKRUPTCY CODE,2016

ORDER

1. Adv. Garodia a/w Adv. Bhoomika Lodhe for the Operational Creditor present through physical mode. Adv. Sachin Subhash Tigde for the Corporate Debtor present through physical mode.

2. The captioned company petition has been filed on 17.11.2022 by Praveen Mangilal Jain (Managing Partner of M/s. Vardhman Cables And Conductors) viz. Operational Creditor herein, seeking initiation of Corporate Insolvency Resolution Process of Elecon Energy Solutions Private Limited viz. Corporate Debtor.

3. The Operational Creditor, in Part-IV of the captioned company petition, has cited the Date of Default as 02.12.2018 at the backdrop of thirteen invoices raised pursuant to "..Original Purchases order and subsequent telephonic order." The total amount due and

Page 13 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 payable qua the said invoices (exclusive of interest), is contended to be INR 1,86,56,489/-.

4. Upon evincing the materials which form part of the records hereto; The period of three years, as mandated u/s. 18 of the Limitation Act, 1963, from the date of cause of action viz. 02.12.2018 culminates on 02.12.2021. The captioned company petition has however been filed belatedly viz. 17.11.2022, and clearly falls out of the purview of the period earmarked at the behest of Hon'ble Apex court (In Suo Moto Writ Petition No. (Civil) 03 of 2020). The captioned petition is therefore, hopelessly barred by limitation and suffers from want of maintainability.

5. In the present circumstances therefore, the captioned company petition is hereby Dismissed. No Order as to costs."

Sd/- Sd/- ANU JAGMOHAN SINGH KISHORE VEMULAPALLI Member (Judicial) Member (Technical)

29. In para-4 of the impugned order Ld. Adjudicating Authority had taken

note of Section 18 of Limitation Act, 1963 and decided that date of cause of

action arose on 02.12.2018 and therefore the limitation period ended after

three years i.e. on 02.12.2021. The company petition has been filed belatedly

on 17.11.2022 and it took a view that it clearly falls out of the purview of the

period mentioned in the judgment of Hon'ble Supreme Court in Suo Motu

Writ Petition No. (Civil)- 03 of 2020. It, therefore, held the petition filed by

the Appellant under Section 9 of the Code to be barred by the limitation.

30. The Appellant herein contends that Ld. Adjudicating Authority's

reading of the judgment of Hon'ble Supreme Court in Suo Motu Writ Petition

No. (Civil)- 03 of 2020 has been erroneous and as the last date of limitation

i.e. 02.12.2021 falls within the COVID exemption period, his limitation would

Page 14 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 recommenced from 01.03.2022 and the period of limitation falling within the

exemption period of 15.03.2020 to 28.02.2022 would be added from

01.03.2022. It is his submission that the balance limitation period for the

instant case would be 626 days from 01.03.2022 and the same would expire

on 17.11.2023.

31. The impugned order has been passed solely on the ground of limitation

and therefore, the only issue which falls for our consideration is whether the

Application filed by the Appellant under Section 9 of the Insolvency and

Bankruptcy Code, 2016 ("Code") on 17.11.2022 was within the period of

limitation?

32. The date of default as stated in Part-IV Section 9 application is

02.12.2018. The Section 9 application should accordingly have been filed

within three years from 02.12.2018 as per the provisions of Section 18 of

Limitation Act. Accordingly, the last date for filing the application would be

02.12.2021, however, the application u/s 9 of the Code was filed by the

Appellant on 17.11.2022.

33. The Adjudicating Authority takes note of these facts and also takes note

of Suo Motu judgment of Hon'ble Supreme Court (supra) and holds that the

application is barred by limitation.

34. In our view the interpretation of the period of exemption by the Ld.

Adjudicating Authority is erroneous. Para-5 of the Suo Motu judgment of

Hon'ble Supreme Court is extracted below:-

"5. Taking into consideration the arguments advanced by Ld. counsel and the impact of the surge of the virus on public health

Page 15 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:

I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi- judicial proceedings.

II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.

III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.

IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos

(b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings."

(Emphasis supplied)

35. The Adjudicating Authority has considered the first part of para-3 of the

judgment (supra), whereby 90 days is allowed as extended period of limitation

from 01.03.2022. If this view is accepted then the limitation period would have

Page 16 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 ended on 29.05.2022. As the application u/s 9 was filed on 17.11.2022, it

was treated as barred by limitation.

36. In this case period from 15.03.2020 till 02.12.2021 would fall within

the COVID exemption period, which comes to 626 days. This period of 626

days would be the additional period, by which limitation would be extended

from 01.03.2022 as per the last sentence of para-3 of Suo Motu judgment

supra.

37. We are of the view that the Ld. Adjudicating Authority has not taken in

account the last sentence of the judgment of Hon'ble Supreme Court. The

para-3 provides that irrespective of limitation period falling during the

15.03.2020 to 28.02.2022, the minimum of 90 days extension would be

provided to the party for filing applications. Even if the limitation period ended

on 15.03.2020, the party concerned would get 90 days from 01.03.2022 to

file his appeal. In cases, where such period of limitation under the COVID

exemption period was more than 90 days, the balance period falling within

the exemption period is to be added from 01.03.2022.

38. In the present factual matrix, the balance period of limitation from

15.03.2020 to 02.12.2021 (the date on which the Limitation period would

have ended u/s 18 of Limitation Act) is 626 days. Therefore, by adding this

period to date of restart of limitation i.e., 01.03.2022, the end date of

limitation comes to 17.11.2023. The Section 9 application was filed on

17.11.2022 and is therefore well within the limitation.

Page 17 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024

39. This Tribunal had considered this issue in several judgments. In one

such case in "Company Appeal (AT) (Ins) No. 1294 of 2023 in Akzo Noble

India Ltd. vs. Stan Cars Pvt. Ltd.", the with identical facts this Tribunal

had considered the matter. The relevant paragraphs 13, 45 & 46 of the

judgment are extracted below:

"13. Ld. Counsel further submitted that the Ld. Tribunal erred in not taking into consideration the time excluded by the Hon'ble Apex Court due to the exclusion of time on account of COVID-19. Taking the exemption period on account the Limitation calculation would be as follows:

Event Limitation

Date of default calculated as Three years from date of default 21.11.2018 as per agreement is 21.11.2021 dated 21.11.2017 Supreme court suo moto in After exclusion of the WP/3/2020 excluded from mentioned time, the date of end 15.03.2020 to 28.02.2022 of limitation is 05.11.2023 Date of Filing Application U/s 28.10.2022 (within Limitation) 7 IBC

45. The second contention of the Appellant relates to the exemption of Covid-19 period by Hon'ble Supreme Court. We have noted that the limitation period from 15.03.2020 to 31.05.2022 has been excluded by the Hon'ble Supreme Court for all purposes vide their Suo Motu Writ Petition (C) No.-3 of 2020 vide their Order dated 10.01,2022. The directions of Hon'ble SC in the Suo-Motu case (supra) are extracted below:

"I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.

Page 18 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.

III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.

IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings."

46. Based on the directions in the Suo-Motu Judgement (supra) the balance period of limitation from 15.03.2020 has to be added to 01.03.2022 to get the revised date of limitation. In the instant case the period is one year 8 months and 6 days. The revised end date of limitation would then be 06.11.2023. The section 7 application in this case was filed on 28.10.2022 which was well within limitation period."

40. We note that the aforesaid judgment of this Appellate Tribunal in Akzo

Nobel (supra) is based on identical facts and is squarely applicable to the

present factual matrix. The judgment has attained finality as there is no

appeal pending against the same.

41. In view of the findings above, we are of the view that Ld. Adjudicating

Authority has made an erroneous finding regarding the limitation. The

application filed by the Appellant under Section 9 of the Code was well within

Page 19 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024 the limitation period. Accordingly, the impugned order is set aside; the Appeal

is allowed; and the C.P. (IB)/25(MB)2023 is restored to its original position.

The matter is remanded to the Adjudicating Authority for adjudicating the

same on merits. Parties to appear Ld. NCLT, Mumbai Bench-IV (Adjudicating

Authority) on 14.10.2026. Pending IAs, if any, are closed. No order as to costs.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical) Place: New Delhi

Harleen

Page 20 of 20 Company Appeal (AT) (Ins.) No. 2285 of 2024