M/S ADVANCE ENGINEERING SERVICES V. THE BARODA RAYON CORPORATION

COURT: National Company Law Appellate Tribunal, Principal Bench: New Delhi

CORAM: Ashok Bhushan (Judicial Member), Dr. Alok Srivastava (Technical Member)

DATE OF JUDGMENT: 13 May 2022

FACTS

That the Appellant, which is a sole proprietorship firm carrying on its business in engineering sector. The work order for the job under question was issued by the respondent company vide letter dated 12.07.2004. The Appellant completed the assigned work and was made some payments by the respondent.

The respondent company acknowledged the operational debt due to the Appellant on numerous occasions through numerous fax message and hand written acknowledgements on its letters requesting payment of the operational debt.

Upon not receiving the due Company Appeal (AT) (Insolvency) No. 222 of 2021 & I.A. No. 1819 of 2021 amount, the Appellant gave a demand notice under section 8 of the IBC and thereafter filed company petition IB No.555/9/NCLT/ AHM/2018.

The said application was contested by the Respondent company, inter alia, raising the ground that the application was barred by limitation and the Adjudicating Authority vide the Order dated 27.1.2021 rejected the section 9 Application.

ISSUE RAISED

Whether the Adjudicating Authority was right in rejecting the application of the Appellants or not?

JUDGEMENT

The Tribunal on the basis of facts, submissions by the parties and previous judgements like State Bank of India vs. Kanahiya Lal &Anr (2016), Asset Reconstruction Company Ltd. Vs. Bishal Jaiswal &Anr. 2021 SCC online 321, had come to the conclusion that that the appellant has not been able to establish the extension of limitation as required under Section 18 of the Limitation Act on the basis of Company Appeal (AT) (Insolvency) No. 222 of 2021 & I.A. No. 1819 of 2021 valid acknowledgments provided by the corporate debtor to the operational debt, which is in default from June, 2006. And the Appellant was not part of the scheme of rehabilitation and therefore he is not entitled to claim exclusion of any period when its legal right of redressal was suspended. We, therefore, are of the view that the Adjudicating Authority did not commit any error in holding that section 9 application of Appellant was barred by limitation.