Agrawal Poly Plast Pvt. Ltd. vs Star Lamipacks Pvt. Ltd.

Heard learned counsel for the Appellant. None has appeared on behalf of the Respondent although notice has been served. The Affidavit of Service in compliance of the order dated 06.12.2021 has also been filed on 04.03.2022.

This Appeal has been filed against order dated 20.03.2020 passed by the Adjudicating Authority (National Company Law Tribunal), Indore Bench at Ahmedabad Court 1 by which the application filed by the Appellant under Section 9 has been rejected as barred by time.

The Appellant has filed an application under Section 9 of the Insolvency and the Bankruptcy Code, 2016 (hereinafter referred to as ‘Code’) on 04.06.2018 claiming total debt due of Rs.81,59,742/- comprising of Rs.30,27,622/- as Principal Amount and rest as interest. The aforesaid amount was claimed out of the bills and invoices which have been noticed in Part IV of the application. It was stated in the application that last payment was received on 09.07.2014 of Rs.2 Lakhs. The application also has mentioned about the confirmation of balance, acknowledgment of due to the Operational Creditor by the Corporate Debtor. The Adjudicating Authority by the impugned order dismissed the application. Para 14 of the impugned order contains the observations of the Adjudicating Authority on basis of which application was held as barred by time, which is to the following effect:

Learned counsel appearing for the Appellant submits that Appellant in his application under Section 9 already made mention of the acknowledgment which was given by the Corporate Debtor and last acknowledgment dated 31.05.2016 was specifically mentioned in the application. It is submitted that the Corporate Debtor has continuously given acknowledgment in each year which Account Confirmation has been brought on the record as Annexure A-6 from the year 2010 till 2016.

We may notice the Part IV of the application where following statement has been made recording the acknowledgment of debt of Rs.30,27,622/-:

It is well settled that on acknowledgment by Corporate Debtor of the debt limitation is extended as per Section 18 of the Limitation Act, 1963. Learned counsel for the Appellant submits that confirmation of account sent by the Corporate Debtor from 01.04.2010 to 31.05.2016 were on the record of the Adjudicating Authority where the debt of Rs.30,27,622/- was mentioned while confirming the account by the Corporate Debtor. The last confirmation of account being issued on 31.05.2016 for the period 01.04.2016 to 30.05.2016, we are of the view that the Appellant can clearly claim the benefit of Section 18 of the Limitation Act and application having been filed within three years from the last letter of acknowledgment on 31.05.2016 the application was well within time. The Adjudicating Authority has not referred to the acknowledgment i.e. confirmation of accounts, which letters were issued by the Corporate Debtor and which were on the record of the Adjudicating Authority. The confirmation of account letters issued by the Corporate Debtor to the Operational Creditor clearly extend the period of limitation for the Appellant to file application under Section 9. We, thus, are of the view that the Adjudicating Authority committed error in rejecting the application as barred by time. The order impugned dated 20.03.2020 is set aside. Application under section 9 being C.P.(IB) No. 319/9/NCLT/AHM/2018 is revived before the Adjudicating Authority. The Adjudicating Authority after issuing notice to the Appellant may pass an order for admission of the application within a period of six weeks from the date copy of this order is produced before the Adjudicating Authority. Parties shall be at liberty to enter into settlement before the aforesaid date. Appeal is allowed accordingly.