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TMI Blog2024 (3) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... tcy Code 2016 ('IBC' in short) by the Appellant arises out of the Order dated 31.10.2023 (hereinafter referred to as 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench-I, Ahmedabad) in CP(IB) No.355/AHM/2020. By the Impugned Order, the Adjudicating Authority has dismissed the Section 9 petition filed by the Appellant seeking to bring the Corporate Debtor under the rigours of Corporate Insolvency Resolution Proceedings ('CIRP' in short). Aggrieved by this impugned order, the present appeal has been preferred. 2. The Learned Counsel for the Appellant making his submissions stated that the M/s. Murphy Steel-Operational Creditor had been supplying goods to the Corporate Debtor- M/s. Gujarat We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not in dispute that the materials were supplied by the Operational Creditor to the Corporate Debtor. However, perusal of the application reveals that the debts are very old and are barred by limitations. We agree with the contentions of the Corporate Debtor as quoted in B. K. Educational Society (supra). No explanation has been given as regards to opening balance how they have arrived and further the Operational Creditor kept quiet for a long time before filing the present application." (Emphasis supplied) 4. It is the case of the Appellant that the above finding of the Adjudicating Authority that the present case was barred by limitation was erroneous since the Adjudicating Authority had failed to notice that the business relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication which is 08.09.2020. In the present case, the Appellant has also failed to bring on record any subsequent acknowledgement of liability in writing by the Corporate Debtor in respect of these 26 invoices which could possibly have extended the period of limitation to bring the outstanding dues within three years from date of filing of Section 9 application. 6. Having perused the material on record and after hearing the submissions of the Learned Counsel for the Appellant, we also do not find any document/agreement between the two parties which evidences running account payment underlying their business operations. In the absence of any documentary evidence which provides foundational basis to the claim of the Appellant that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cational Services Pvt. Ltd. Vs. Parag Gupta and Ors. (2019) 11 SCC 633 wherein after considering the statutory provisions of the IBC and the Limitation Act, it has been settled that for filing application under Section 9 of the IBC, Article 137 is attracted. Paragraph 42 of the above judgment reads as follows: "42. It is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. "The right to sue", therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, sav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiation 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 time-barred save and except in those cases where, on facts, the delay in filing may be condoned; and (h) an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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