Shankar Vardharajan vs Dewachand Ramsaran Corporation Pvt. ...

For Appellant : Mr. Anish R. shah and Mr. Ravhav R., Advocates

For 1st Respondent: Mr. Ashim Sood and Ms. Payal Chandra, Advocates

ORDER

28.11.2018 This appeal has been preferred by the Director of 'M/s. Win

Wind Power Energy' (Corporate Debtor) against the order dated 28th September,

2018 passed by the Adjudicating Authority (National Company Law Tribunal),

Single Bench, Chennai in C.P./250/IB/2018 whereby and whereunder the

application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for

short, 'the I&B Code') preferred by 'M/s. Dewanchand Ramesaran Corporation

Private Limited' has been admitted and 'corporate insolvency resolution process'

has been initiated against the 'Corporate Debtor'.

2. Learned counsel appearing on behalf of the appellant submitted that claim

of the respondent was time barred as they had claimed from 'M/s. Win Wind

Power Energy' of various project in the year 2014. Reliance has been placed on

the decision of the Hon'ble Supreme Court in 'B.K. Educational Services Pvt. Ltd. 2

vs. Parag Gupta and Associates' in Civil Appeal No. 23988 of 2017 wherein the

Hon'ble Supreme Court observed that the Limitation Act has in fact been applied

since the inception of the Code and observed as below:

"27. It is thus clear that since the Limitation Act is

applicable to applications filed under Sections 7

and 9 of the Code from the inception of the Code,

Article 137 of the Limitation Act gets attracted.

"The right to sue", therefore, accrues when a

default occurs. If the default has occurred over

three years prior to the date of filing of the

application, the application would be barred

under Article 137 of the Limitation Act, save and

except in those cases where, in the facts of the

case, Section 5 of the Limitation Act may be

applied to condone the delay in filing such

application.

28. In view of our finding that the Limitation Act has

in fact been applied from the inception of the

Code, it is unnecessary for us to go into the

arguments based on the doctrine of laches. The

appeals are therefore remanded to the NCLAT to

decide the appeals afresh in the light of this

judgment."

Company Appeal (AT) (Insolvency) No. 735 of 2018 3

As per Section 238A of the I&B Code :

"238A. Limitation.--The provisions of the

Limitation Act, 1963 (36 of 1963) shall, as far as

may be, apply to the proceedings or appeals

before the Adjudicating Authority, the National

Company Law Appellate Tribunal, the Debt

Recovery Tribunal or the Debt Recovery Appellate

Tribunal, as the case may be."

3. It is true that the Limitation Act is applicable as far as it practicable in

terms of Section 238A of the I&B Code. For triggering a resolution process under

Section 7 or Section 9 or Section 10 of the I&B Code, Article 137 of Part II of the

Limitation Act is applicable, which reads as follows:

PART II - OTHER APPLICATIONS

Description of application Period of Limitation Time from which period being to run

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

limitation is provided elsewhere in this division

From the aforesaid provision, it is clear that where the period of limitation

has not been prescribed elsewhere, three years limitation period has been

prescribed since the date when right to apply accrues.

4. In the present case, the right to apply under Section 9 of the I&B Code

accrued to the respondent since 1st December, 2016 when the I&B Code came

Company Appeal (AT) (Insolvency) No. 735 of 2018 4

into force. Therefore, we find that for triggering the application under Section 9,

the application is within the time limit.

5. So far as the claim is concerned, it is for the 'Interim Resolution

Professional / Resolution Professional' to decide the claim, which may be

corrected by the Adjudicating Authority if so required, and in appropriate case,

he may decide whether the claim is time barred or not.

6. In the present case, it is not the case of the appellant that there is no debt

payable in the eyes of the law. In this case an amount of Rs.1,99,27,145/- was

payable together with interest @ 18% per annum as claimed by the respondent.

This claim was made initially in the year 2014 when the company petition was

filed, which was disposed of due to certain defects in the earlier application on

1st August, 2017. Therefore, the present application cannot be stated to be

barred by limitation and on the other hand we find there is continuous cause of

action.

For the aforesaid reason, we are not inclined to interfere with the

impugned order passed by the Adjudicating Authority. The appeal is accordingly

dismissed.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk/

Company Appeal (AT) (Insolvency) No. 735 of 2018