Wpil Limited vs Gammon India Limited

the resolution of an amount of Rs. 77 20, 941/- as on 25.08.2018,

has been dismissed on the ground of limitation.

2. In brief, Respondent vide its two letters of intent dated

19.01.2010 entered with the Appellant appointed it as

Company Appeal (AT) (Ins.) No. 12 of 2024 subcontractor for one of the works under the main contract

entered between VISA Steel Limited and the Respondent. The

Appellant agreed to provide certain materials alongwith the

necessary services to Respondent. The parties were performing

their obligations as per the terms and conditions mentioned in the

LOIs and the Appellant was issuing running invoices from time to

time but it is alleged that only part payment was made. The rn

Appellant reconciled the accounts of the Respondent and found a

sum of Rs. 50,13,602 payable. The last invoice was raised on

31.11.2012 and it is alleged by the Appellant that the debt was

admitted by email by the Respondent on 07.10.2016. The

Appellant issued notice of demand on 07.08.2018 and ultimately

on 27.09.2019 issued demand notice under Section 8 of the Code

to Respondent. According to the Appellant the petition under

Section 9 was filed before the Tribunal on 09.10.2019 because the

Tribunal was closed because of Holiday from 02.10.2019 till

08.10.2019 (Dusshera Holiday). The application filed by the

Appellant was contested by the Respondent before the Tribunal on

the ground that even if the acknowledgment of debt is considered

from the email dated 07.10.2016, the petition having been filed on

09.10.2019 is barred by limitation. It was also contended that the

email exchanged between the parties cannot be treated as

Company Appeal (AT) (Ins.) No. 12 of 2024 3

acknowledgement on the part of the Respondent and reliance was

placed on a decision of this Court in the case of M/s G.L. Shoes

Vs. M/s Action Udhyog Pvt. Ltd., CA (AT) (Ins) No. 846 of 2022

decided on 24.05.2023 alleging that Section 18 of the Limitation

Act, 1963 (in short 'Act') provides that acknowledgement should be

in writing and signed by the party against whom such right is

claimed. The Tribunal while dealing with the contention of the

Appellant that the petition has been filed on 09.10.2019 is within•

the period of limitation made the following observations which are

reproduced as under:-

"Having perused the record, we are of the considered view that admittedly the last invoice was issued on 31.11.2012. Even if the email dated 07.10.2016 is taken into consideration the present petition cannot be said to have been filed within the period of limitation. The present petition was filed on 09.10.2019 which is beyond period of three years even from the so-called acknowledgement through email dated 07.10.2016."

3. It was also contended by the Appellant that the period of 10

days of the notice issued under Section 8 of the Code has to be

excluded from the total period of limitation of three years as

envisaged under Article 137 of the Act and relied upon a decision

of the Hon'ble Supreme Court in the case of Disha Constructions

And Ors. Vs. State of Goa and Ors., Manu/SC/ 1489/2011 but the

Company Appeal (AT) (Ins.) No. 12 of 2024 4

said contention was repelled by the Tribunal on the ground that in

the case of Disha Constructions (Supra) the Hon'ble Supreme

Court was dealing with Section 80 of the CPC which is not

applicable to the present case because the Code is complete in

itself and there is no provision in it that the period spent in

issuance of demand notice (10 days) has to be excluded while

reckoning the period of limitation for filing the petition under

Section 9 of the Code.

4. Aggrieved against the impugned order, the present appeal

has been filed under Section 61 of the Code.

5. The first contention raised by the Appellant is that the

application having been filed on 0910.2019 is within the period of

limitation of three years if the limitation is to be counted from the

email dated 07.10.2016. In this regard, it is submitted that since

there were Holidays from 02.10.2019 till 08.10.2019 in the

Tribunal in which the application under Sectign 9 was filed and in

support the calendar of the year 2019 of NCLT, Mumbai is

appended as Ann.exure A3 in which 02.10.2019 has been shown

as the Holiday on account of Mahatma Gandhi Birthday,

03.10.2019 and 04.10.2019 have been shown as local holidays,

05.10.2019 and 06.10.2019 being the Saturday and Sunday and

Company Appeal (AT) (Ins.) No. 12 of 2024 07.10.2019 and 08.10.2019 have been shown as Additional

Dussehra and Dussehra Holidays. Counsel for the Appellant has

submitted that as per Section 4 of the Act if the period of limitation

expires during the Holiday and the suit, appeal or application is

filed on the date when the court reopens then the period during

which the court remained closed has to be excluded.

6. The second contention of the Appellant is in regard to

exclusion of period of 10 days spent by the Appellant while

issuance of notice under Section 8 which is a pre-requisite for filing

the application under Section 9 of the Code and in this regard she

has relied upon a decision of the Honble Supreme Court in the

case of Disha Constructions (Supra) and also Section 15(2) of the

Act as per which the period of limitation for any suit of which, notice

has been given has to be excluded.

7. During the pendency of this appeal, Counsel for the Appellant

has also filed an additional affidavit of Sunil A Vyas who is

associated with M/ s Fox Mandal 85 Associates (law firm) in which

he has averred that the NCLT was closed for vacation from

02.10.2019 till 08.10.2019, therefore, the Appellant was unable to

file CP until 09.10.2019. It is further averred that on 09.10.2019

he approached the registry of the NCLT to file the CP, accompanied

Company Appeal (AT) (Ins.) No. 12 of 2024 6

with a pay order for the payment of Court fees but he was informed Th that vide notification dated 27.09.2019, issued by the NCLT,

payment of the Court fee was required to be made through

Bharatkosh Web based portal system and the pay order was not

accepted by the registry. Consequently, he obtained Bharatkosh

payment receipt on 09.10.2019 only by 04:24 PM. In this regard,

he has annexed notification dated 27.09.2019 and certified copy

of the bharatkosh receipt dated 09.10.2019 which are reproduced

for a ready reference:-

ko.von00111t/ A ti voca t C

neftlite (116 is, .NICLT.G, , , , •;,Murnbai hat; 6ra-tiorta I ised. BtlitriitktislA wetif base. portal system accept the as',.pte-cribeci in the Taie of" feiVS . .4-fr ...t E&ule, 2016 t 0 ''19,(-

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ider (1P(.) wilt 12c disc,ntintic 01...14209

baeett.pOitql receipt of the 0a-v-irtn-t. of .registration.- of petitiovirtild

Company Appeal (AT) (Ins.) No. 12 of 2024 7

Port

Dated; Oct 2019

eived from MS./MRS. Divrt Trans k14:1* 0042 9 20 ' 1NR 2000 Tw d On interriet Da se Onlirie in n,r,v'rfrm..rtt

NG FEEt.MUM BAIL Court,f e-

"Tili'S..ks a stemi,:enereted trft hence nt? reou 1 fc.r.the purpose of Printed On: 09.10-2029 04:2- .4 "

8. It is also averred that the application under Section 9 was

filed on 09.10.2019 on which the registry raised objection

on10.10.2019 which were duly rectified by on 11.10.2019 but the

NCLT web portal erroneously reflected the date of filing and the

date of registration of the CP as 14.10.2019. He has also averred

that the registry has confirmed that this discrepancy is due to

technical error on the web portal of the NCLT.

9. Counsel appearing on behalf of Respondent has firstly denied

that the email dated 07.10.2016 is the acknowledgement of debt

• in terms of Section 18 of the Code and relied upon a decision of

this court in the case M/s G.L Shoes (Supra) contending that the

Company Appeal (AT) (Ins.) No. 12 of 2024 8

acknowledgement has to be in writing and signed. It is further

submitted that even if it is presumed that email dated 07.10.2016

is the acknowledgement of debt, for the sake of argument, and the

NCLT was closed as per calendar for the year 2019 attached as

Annexure A3 from 02.10.2019 till 08.10.2019 yet the application

has not been filed by the Appellant on 09.10.2019. He has filed an

affidavit of Jaysingh Ashar, Power of attorney holder of the

Respondent Company dated 03.01.2025 in which he has averred

that the petition under Section 9 was filed on 10.10.2019 vide

diary no. 7074 of 2019 issued by the registry of the Tribunal. He

•has further averred that the defects were raised on 10.10.2019 by

the registry which was alleged to have been rectified by the

Appellant on 11.01.2019, it is thus therefore, submitted that the

appellants cannot take the recourse to Section 4 of the Act as the

petition was not filed on 09.10.2019 and in this regard, the

Tribunal has also committed an error in recording in its order that

the petition was filed on 09.10.2019. In support of his

submissions, he has also attached annexure A i.e. certified copy of

the petition filed by the Appellant before the Tribunal bearing

stamp of registry in which the date of filing is mentioned as•

10.10.2019 and the diary no. has been mentioned as 7074.

Company Appeal (AT) (Ins.) No. 12 of 2024 9

10 It is next argued by the Respondent that though a notice

under Section 8 is required as pre-requisite to be served for a

period of 10 days on the CD but the said period cannot be

excluded. It is submitted that in the case of Dish Constructions

(Supra) is of no avail to the Appellant because in that case there

was an agreement between the parties for construction of a'school

auditorium for Rs. 24 Laks approximately but the Respondent paid

only 18 Lakhs and remaining amount was to be paid by

30.09.2006. The suit was filed on 24.10.2009 but the Appellants

in that case already sent a notice in February, 2009 and prayed

for exclusion of time period under Section 15(2) of the Act. It was

held by the Hon'ble Supreme Court that if the notice has been sent

within the period of limitation then the exclusion can be granted.

It is submitted that Section 15(2) of the Act only confined, to the

suits and not to the applications whereas proceedings under

Section 9 is triggered by filing an application for which the

limitation has been provided under Article 137 of the Act. He has

also submitted that Section 15(1) also deals with computation of

period of any suit or application for the execution of a decree.

Meaning thereby that the legislature has specifically provided the

exclusion of period of limitation for specific nature of litigation i.e.

suit or application for execution of a decree and not for all §orts of

Company Appeal (AT) (Ins.) No. 12 of 2024 10

applications. In the end, it is submitted that the Code is complete

in itself in which there is no provision for excluding the period

spent on sending demand notice under Section 8 of the Code for

the purpose of computing the period of limitation in an application

filed under Section 9 of the Code.

11. We have heard Counsel for the parties and perused the record

with their able assistance.

12. The present application has been filed under Section 9 of the

Code. The limitation to file the application under Section 9 is

governed by Article 137 of the Act which is reproduced as under:-

Description of Period of limitation Time from which period

application begins to run

137. Any other Three years. When the right to apply

application for which no accrues.

period of limitation is

provided elsewhere in

this Division.

13. The Appellant has taken the limitation from the email dated

07.10.2016 purported to be an acknowledgement of debt by the

Respondent in terms of Section 18 of the Act. In such

circumstances, considering the period of limitation of three years

Company Appeal (AT) (Ins.) No. 12 of 2024 11

as provided under Article 137, the petition under Section 9 should

have been filed by 07.10.2019. The case set up by the Appellant is

that the petition could not be filed on 07.10.2019 f)ecause of

holidays commencing from 02.10.2019 till 08.10.2019 and could

have been filed only on 09.10.2019 The case of the Appellant is

that in view of Section 4 of the Act the period during which the

court was closed has to be excluded. Section 4 of the Act is

reproduced as under:-

"4. Expiry of prescribed period when court is closed.-- Where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court re-opens.

Explanation.--A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day."

14. There is no dispute that when the period provided for suit,

appeal or application expire on a day when the court is closed then

the suit appeal or application can be instituted on the date when

the court reopens.

15. As per Section 4 of the Act, the Appellant deserves the

protection of Section 4 of the Act but the fact is otherwise as has

been conveyed by the Respondent that the application has been

Company Appeal (AT) (Ins.) No. 12 of 2024 12

filed on 10.10.2019 instead of 09.10.2019. The very fact that the

Appellant purchased court fee from bharatkosh on 09.10.2019 at

04:24PM and at that time there was no procedure for online filing

and all the applications were required to be filed by presenting the

same before the registry of the Tribunal by way of a hard copy, the

application could not have been filed on 09.10.2019 itself. It is

otherwise clear from the certified copy attached by the Respondent

with its affidavit dated 03.01.2025 that the petition was filed by

the Appellant on 10.10.2019 vide diary no. 7074 of 2019 which

was examined by the registry on the same day and objection was

raised which was alleged to have been removed by the Appellant

on 11.10.2019 for the purpose of refiling.

16. Thus, in view of the aforesaid factual circumstances the

application having been filed on 10.10.2019 was beyond the period

of limitation as envisaged under Article 137 of the Act and was

clearly time barred.

17. Now the second question would arise as to whether the

Appellant can exclude the period of 10 days out of the total period

of three years on account of sending the notice under Section 8 of

the Code and rely upon Section ,15(2) of the Act and the decision

Company Appeal (AT) (Ins.) No. 12 of 2024 13

of the Hon'ble Supreme Court in the case of Disha Constructions

(Supra)?

18. In this regard, Section 8 86 9(1) of the Code deserves to be

referred to which are reproduced as under:-

"Section 8: Insolvency resolution by operational creditor.

*8. (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtJ2 or copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. (2)The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor--

(a) existence of a dispute, [if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute;

(b) the [payment] of unpaid operational debt--

(i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or

(ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor.

Explanation.--For the purposes of this section, a "demand notice" means a notice served by an operational creditor to the corporate debtor demanding 2[payment] of the operational debt in respect of which the default has occurred.

Company Appeal (AT) (Ins.) No. 12 of 2024 14 Section 9: Application for initiation of corporate insolvency resolution process by operational creditor.

*9. (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub- section (2) of section 8, the operational creditors' may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process."

19. Section 8(1) provides that the OC may issue a notice

demanding payment which may be replied within a period of 10

days of the receipt by the CD but Section 9(1) provides that

application under Section 9 can only be filed after the expiry period

of notice of 10 days under Section 8(1) of the Code. The Appellant

has relied upon Section 15 of the Act to contend that the appellant

had given notice as prescribed under the Code which is sine qua

non for filing the application under Section 9 of the code,

therefore, the Appellant was required to await the expiry of 10 days

from the date of delivery of the notice to file the application under

Section 9 of the code which has to be excluded in terms of Section

15(2) of the Act. In this regard, it would be relevant to refer to • Section 15 of the Act as well which is reproduced as under:-

Company Appeal (AT) (Ins.) No. 12 of 2024 15

"15. Exclusion of time in certain other cases.--(1) In computing the period of limitation of any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded.

(2) In computing the period of limitation for any suit of which notice has been given, or for which the previous consent or sanction of the Government or any other authority is required, in accordance with the requirements of any law for the time being in force, the period of such notice or, as the case may be, the time required for obtaining such consent or sanction shall be excluded.

Explanation.--In excluding the time required for obtaining the consent or sanction of the Government or any other authority, the date on which the application was made for obtaining the consent or sanction and the date of receipt of the order of the Government or other authority shall both be counted.

(3) In computing the period of limitation for any suit or application for execution of a decree by any receiver or interim receiver appointed in proceedings for the adjudication of a person as an insolvent or by any liquidator or provisional liquidator appointed in proceedings for the winding up of a company, the period beginning with the date of institution of such proceeding and ending with the expiry of three months from the date of appointment of such receiver or liquidator, as the case may be, shall be excluded.

(4) In computing the period of limitation for a suit for possession by a purchaser at a sale in execution of a decree, the time during which a proceeding to set aside the sale has been prosecuted shall be excluded.

Company Appeal (AT) (Ins.) No. 12 of 2024 16

(5) In computing the period of limitation for any suit the time during which the defendant has been absent from India and from the territories outside India under the administration of the Central Government, shall be excluded."

20. Section 15 has two parts. Section 15(1) deals with

computation of period of limitation for any suit or application for

the execution of a decree. Whereas Section 15(2) deals with

computation of period of limitation for any suit of which notice has

been given. In this regard, it would be relevant to mentiOn that

Section 2(j) defines period of limitation which means the period of

limitation prescribed for any suit, appeal or application by the

schedule and prescribed period means the period of limitation

computed in accordance with the provisions of this Act. The

schedule appended with the Act has three divisions in which first

division deals with the suit having 10 parts in which the

description of suit, the period of limitation and time from which

period begins to run has been provided. Second division of the

schedule deals with appeals in which the same has been provided

and the 3rd division is regarding applications in which part 1 deals

with applications in specified cases and part II deals with other

applications. The purpose of explaining the schedule is to highlight

that there are different period of limitation prescribed for different

Company Appeal (AT) (Ins.) No. 12 of 2024 17

kind of suits, appeals and different applications but where no

limitation is prescribed for any other application then the period of

three years has been provided for such type of application when

the right to apply accrues. This is Article 137 of the Act which

applies to the cases arising of the Code for the purpose of filing an

application under Section 7, 9 or 10 of the Code.

21. Since, Section 15(1) only confines to the suit or an application

for the execution of a decree and 15(2) is confined to only suit

which requires issuance of notice and the said period of notice has

to be excluded whereas the present case it is only an application

under Section 9 of the Code and not a suit and is not covered by

Section 15(2) of the Act.

22. In this regard reference may be had to the decision of the

Hon'ble Supreme Court in the case of Gaurav Hargovindbhai Dave

Vs. Asset Reconstruction Company (India) Ltd. 86 Anr., (2019) 10

SCC 572 and the decision of this Court in the case of Rourkela

Steel Syndicate Vs. Metistech Fabricators Pvt. Ltd. 2023 SCC

•Online NCLAT 1101 in which it has been held that the application

under Section 7 or 9 is not a suit.

Company Appeal (AT) (Ins.) No. 12 of 2024 18

23. Hence, the argument of the appellant in this regard is not acceptable

and the decision in the case of Disha Constructions (Supra) is also not

applicable.

24. No other point has been raised.

25. In view of the aforesaid discussion, we do not find any error in the

impugned order and the same is hereby dismissed. No costs.

Pending IAs, if any, are hereby closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical)

New Delhi 21st January, 2025 sheetal

Company Appeal (AT) (Ins.) No. 12 of 2024