TMI Blog2022 (9) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 9 of the IBC, within three years from the date on which an application under those provisions of the IBC could have first been made before the NCLT even though the right to sue may have accrued decades ago - the pendency of the proceedings in a parallel forum, invoked by the Respondent, is not sufficient cause for the delay in filing an application under Section 9 of the IBC. By the time the application was filed, the claim had become barred by limitation. It is now well settled that the provisions of the Limitation Act are applicable to proceedings under the IBC as far as may be - Similarly, under Section 18 of the Limitation Act, an acknowledgment of present subsisting liability, made in writing in respect of any right claimed by the opposite party and signed by the party against whom the right is claimed, has the effect of commencing of a fresh period of limitation, from the date on which the acknowledgment is signed. However, the acknowledgment must be made before the period of limitation expires. A claim may not be barred by limitation. It is the remedy for realisation of the claim, which gets barred by limitation. The impugned order of the NCLAT is unsustainable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent for curing of defects. The Winding Up petition was represented on 3rd February 2016, but again returned on 24th May 2016 with an endorsement to comply with the defects as intimated earlier. 7. The IBC came into force on 1st December 2016. Thereafter the Respondent issued a demand notice on 14th November 2017 under Section 8(1) calling upon the Appellant to repay its dues. 8. On 30th March 2018, the Respondent filed petition being CP/724/ (IB)/2018 under Section 9 of the IBC for initiation of the Corporate Insolvency Resolution Process (CIRP) in the NCLT. On 20th June 2018, the Adjudicating Authority (NCLT) directed the Registry to issue notice to the Appellant. 9. By an order dated 2nd January 2019, the Adjudicating Authority (NCLT) rejected the application as barred by limitation, placing reliance on the judgment of this Court in B.K. Educational Services Pvt. Ltd. v. Parag Gupta and Associates (2019) 11 SCC 633 . The application under Section 9 of the IBC was accordingly dismissed. 10. The Respondent appealed to the NCLAT under Section 61 of the IBC. By the impugned judgment and order, the NCLAT has set aside the order dated 2nd January 2019 passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation. The condition precedent for exercise of such discretion is the existence of sufficient cause for not preferring the appeal and/or the application within the period prescribed by limitation. 15. In Ramlal, Motilal Chhotelal v. Rewa Coalfields Ltd. AIR 1962 SC 361 , this Court affirmed the view taken by the Madras High Court in Krishna v. Chathappan 1889 SCC Online Mad 1 and held that Section 5 of the Limitation Act gives the Court a discretion, which is to be exercised in the way in which judicial power and discretion ought to be exercised, upon principles which are well understood. 16. The condition precedent for condonation of the delay in filing an application or appeal, is the existence of sufficient cause. Whether the explanation furnished for the delay would constitute sufficient cause or not would be dependent upon facts of each case. There cannot be any straitjacket formula for accepting or rejecting the explanation furnished by the Appellant/applicant for the delay in taking steps. 17. When an appeal is filed against an order rejecting an application on the ground of limitation, the onus is on the Appellant to make out sufficient caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent issue and honour the post-dated cheques for the five monthly instalments. The Petitioner states that the Respondent sent a reply dated 07.06.2013 stating that they are unable to pay 1st instalment on 01.06.2013 and informed that the same will be paid on 20.06.2013. The Petitioner sent a sur-rejoinder dated 14.06.2013 and asked the Respondent to proceed with the payment schedule proposed by them and it is made very clear that the discount and the waiver of interest offered by the Petitioner is strictly on the condition that the Respondent adhere to the payment schedule. The Respondent paid the 1st instalment and failed to make any further payment and therefore the Petitioner sent a reminder dated 02.08.2013. The Respondent did not honour their promise and miserably failed to make payment for the 2nd instalment and therefore the Petitioner was constrained to revoke their offer and issued notice dated 14.10.2013 demanding the Respondent to pay Rs.38,84,709/- (Rupees Thirty Eight Lakhs Eighty Four Thousand Seven Hundred and Nine only) with interest. The Petitioner states that the Respondent issued reply dated 07.11.2013 and confirmed the non-payment of instalments as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. 24. Similarly, under Section 18 of the Limitation Act, an acknowledgment of present subsisting liability, made in writing in respect of any right claimed by the opposite party and signed by the party against whom the right is claimed, has the effect of commencing of a fresh period of limitation, from the date on which the acknowledgment is signed. However, the acknowledgment must be made before the period of limitation expires. 25. Proceedings in good faith in a forum which lacks jurisdiction or is unable to entertain for like nature may save limitation. Similarly, acknowledgment of liability may have the effect of commencing a fresh period of limitation. 26. In this case, the last acknowledgment was in 2013 and the Madras High Court neither suffered from any defect of jurisdiction to entertain the winding up application nor was unable to entertain the winding up application for any other cause of a like nature. 27. The NCLAT held :- From the facts as narrated above, it will be evident that the winding up pet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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