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TMI Blog2024 (2) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as HCCL or Corporate Debtor) against the Impugned Order dated 25.08.2023 passed by the National Company Law Tribunal, Mumbai Bench, (Adjudicating Authority) in Company Petition (IB) No. 147/MB-IV/2021 under Section 9 of the IBC, 2016. Brief facts of the Appeal relevant for the case : 2. M/s Laxmi Trading Corporation (Operational Creditor) was supplying hardware tools, rubber goods, pipes and fittings, and other related equipment to M/s Hindustan Construction Company Limited (Corporate Debtor), which is engaged in the business of Engineering and Construction, Real Estate, Infrastructure, Urban Development & Management. The Corporate Debtor had bought hardware goods from the Operational Creditor by various purchase orders between the period of 2010 to 2019. The OC had issued/raised various invoices with a total amount of Rs.3,71,55,764.8 (Rupees Three Crores Seventy-One Lakhs Fifty-Five Thousand Seven Hundred Sixty-Four and eighty Paisa only), aggregating in all the projects. Out of these invoices, the CD has made partial payments on running account basis amounting to Rs.2,17,47,092.13 (Rupees Two Crores Seventeen Lakhs Forty-Seven Thousand and Ninety-Two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate. 7. Furthermore, Respondent claims that the emails of 10.11.2017 and 14.07.2017, purportedly, sent by the Respondent to the Appellant will not make Section 18 of the Limitation Act applicable in the present case as the so called acknowledgement of liability by these emails is not before the expiration of the period of limitation i.e. as such the claims pertaining to Kashang Hydro Electric Project and the Uri Project were rendered time barred as these emails are much beyond the period of expiration of limitation. Individually, in the case of Kashang Hydro Electric Project the due date for the last invoices had fallen on 28.06.2014. The claims were rendered time barred on 28.06.2017. And the purported emails sent by the Appellant is dated 10.11.2017, which is much after the period of expiry of limitation. Similarly, the due date for the last invoice for the Uri Project had fallen on 23.01.2014. The claims were rendered time barred on 23.01.2017. Appellant had relied upon email dated 14.07.2017, which is much after the period of expiry of limitation. 8. Respondent also relies upon the judgment of this Tribunal in S.M. Ghogbhai Vs. Schedulers Logistics India Pvt. Ltd. (2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates that ledger accounts are being maintained project wise and are not on running account basis. The Operational Creditor has been maintaining separate accounts for each project and the receipts of payments were deposited in appropriate specific project account and not in a common account. The claim of the Operational Creditor that these are prepared for their convenience is not a satisfactory reply and cannot be accepted. 13. There is an attempt by the Operational Creditor to take refuge under Article-1 for calculating the limitation period, instead of Article 137 of the Schedule of the Limitation Act, 1963, by claiming their account to be a running account. The question of applicability of Article 1 or Article 137 in IBC proceedings is well settled. For appreciating applicability of the correct article, both Article-1 and Article 137 of Limitation Act, 1963 are extracted as follows : This Tribunal in S.M. Ghogbhai Vs. Schedulers Logistics India Pvt. Ltd. [2022 SCC Online NCLAT 216] had held that proceedings under Section 9 of the IBC 2016 cannot be set to be a suit relating to accounts and as such Article 1 of the Limitation Act is not applicable and the period of limitation f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code is not to give a new lease of life to debts which are timebarred; (d) that the period of limitation for an application seeking initiation of CIRP under Section 7 of the Code is governed by Article 137 of the Limitation Act and is, therefore, three years from the date when right to apply accrues; (e) 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 timebarred 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." [Emphasis supplied] 14. For better appreciation of the applicability of Limitation Act in the facts of this case, the details of invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd noted in previous paragraphs the Limitation period begins to run from the time when the right to apply accrues i.e. limitation will be three years from when the right to apply accrues, which is over for 224 out of 234 invoices, as the due dates of these invoices, admittedly are from 2013 to 2014. In the instant case there are six projects, located in different locations, though under the same construction company viz HCCL. Most of the invoices pertain to the period of 2012 to 2014 and default dates varies from the year 2012 to 2014 in majority of the cases. Therefore, the three-year limitation period, even for the last invoice out of the 224 invoices had lapsed in September 2018, while this Company Petition was filed on 25th February, 2021. Therefore, the argument of the petitioner that Company Appeal (AT) (Insolvency) No. 1476 of 2023 12 of 15 the limitation stood extended is not tenable. And the arguments of the respondent for application of Article 1 of the Limitation Act stand rejected and under Article 137 out of 234 claims 224 are ex-facie time barred. 17. Furthermore, it is claimed that the period of limitation stood extended separately for the six sites and the claim fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has been filed much after the expiry of the said limitation. Therefore, section 18 of the Limitation Act will not help and this email as the acknowledgement of debt does not help the operational creditor. 20. Now we look into the issue whether the emails of 14.07.2017, 07.01.2019 and 26.03.2019, annexed to the petition constitute an acknowledgement of debt or not. We have already noted that most of the claims of Operational Creditor have become time barred and for the remaining 10 invoices it is not able to cross the hurdle of the threshold of Rupees one crore. As the emails exchanges listed herein are not before the expiration of the period of limitation and limitation has expired much prior to the email exchange. Therefore, the claims either suffer from hurdle of limitation or threshold or most of the time by both. In the present case as the so-called acknowledgement of liability by these emails is not before the expiration of the period of limitation. Taking these projects individually, in the case of Kashang Hydro Electric Project the due date for the last invoices had fallen on 28.06.2014. The claims were rendered time barred on 28.06.2017. And the purported emails sent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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