TMI Blog2022 (5) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... o Article 1 of the Limitation Act came for consideration before the Hon ble Supreme Court in Hindustan Forest Company case. Article 1 is in Part-I of the Schedule of the Limitation Act dealing with suits, under the suit relating to accounts . The Application filed under Section 9 by the Appellant cannot be said to be a suit relating to accounts. The Ledger of Operational Creditor has been brought on record including the Bank Statement which clearly mentions that last payment received by the Appellant was on 26th September, 2016. From the last payment, the Application could have been filed within three years. Application under Section 9 filed by the Appellant was on the basis of 174 invoices as has been noticed by the Adjudicating Authority in the Impugned Order. We are satisfied that for the limitation for filing Section 9 application it is Article 137 of the Limitation Act, 1963 which is attracted. Under Article 137, time from which period begins to run is when the right to apply accrues the right to apply accrues when invoices issued by the Appellant to the Corporate Debtor were not paid. Invoices on the basis of which payment is claimed are more than three years earlier fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Counsel-Kayomars K. Kerawalla and Kunal Mehta for the Respondent. 4. Learned Counsel for the Appellant submits that both the parties were maintaining a running account and there have been transactions inter se which is reflected from the Ledger Account filed by the Respondent. In the facts of the present case, Article 1 of the Limitation Act, 1963 was attracted as per which the limitation period of 3 years begins to run from the close of the year in which the last item admitted or proved is entered into the account. Thus the limitation period begins to run from 31st March, 2017 being the close of the financial year in which the last item is entered hence the Application filed on 24th October, 2019 was within three years from 31st March, 2017 and was not barred by limitation. There being mutual account between the parties, Article 1 of the Limitation Act is attracted and the Adjudicating Authority committed error in rejecting the Application as barred by time. 5. Learned Counsel for the Respondent refuting the submissions of Learned Counsel for the Appellant contends that before the Adjudicating Authority, claim were raised by the Appellant was only on the basis of 174 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account. 10. Learned Counsel for the Appellant submits that the provisions of Limitation Act are attracted in reference to Section 7 and 9 Application. Reliance has been placed on the Judgment of Hon ble Supreme Court in (2021) 7 SCC 313 in the matter of Sesh Nath Singh Vs. Bidyabati Sheoraphuli Coop. Bank Ltd. In paragraph 65 of the Judgment, following has been laid down: 65. As observed above, Section 238-A IBC makes the provisions of the Limitation Act, as far as may be, applicable to proceedings before NCLT and NCLAT. The IBC does not exclude the application of Sections 6 or 14 or 18 or any other provision of the Limitation Act to proceedings under the IBC in NCLT/NCLAT. All the provisions of the Limitation Act are applicable to proceedings in NCLT/NCLAT, to the extent feasible. 11. It is well settled that the Limitation Act is applicable in IBC Proceedings and IBC does not exclude the application of Sections 6 to 14 or 18 and any provision of the Limitation Act as has been held by this Court in the above case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) that the trigger for initiation of CIRP by a financial creditor is default on the part of the corporate debtor, that is to say, that the right to apply under the Code accrues on the date when default occurs; (f) that default referred to in the Code is that of actual non-payment by the corporate debtor when a debt has become due and payable; and (g) that if default had occurred over three years prior to the date of filing of the application, the application would be time-barred save and except in those cases where, on facts, the delay in filing may be condoned; and (h) an application under Section 7 of the Code is not for enforcement of mortgage liability and Article 62 of the Limitation Act does not apply to this application. 14. Learned Counsel for the Appellant in support of his submissions submits that there were mutual dealings between the parties and reliance has been placed on the Judgment of Hon ble Supreme Court of India in Hindustan Forest Company Vs. Lal Chand and Ors. (AIR 1959 SC 1349). Hon ble Supreme Court in the above case was considering Article 115 of Jammu and Kashmir Limitation Act which was pertaining to suit regarding the balance due on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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