Court Dismisses Appeal, Upholds Dismissal of Insolvency Petition Due to Time-Barred Claims - 2024-02-27

JUDGEMENT

Brief Facts of the Appeal:

• Laxmi Trading Corporation (Operational Creditor) supplied hardware tools, rubber goods, pipes, and fittings to Hindustan Construction Company Limited (Corporate Debtor).
• The Corporate Debtor made partial payments, but a shortfall of Rs.1,54,08,672.77 remained.
• The Operational Creditor issued a demand notice for Rs.3,73,32,239.30, including interest.
• The Corporate Debtor failed to reply, and the Operational Creditor filed an application before the NCLT, which was dismissed.

Respondent's Case:

• The Respondent argued that the claims were time-barred and below the threshold limit of Rs.1,00,00,000/-.
• The Respondent relied on the judgment in S.M. Ghogbhai Vs. Schedulers Logistics India Pvt. Ltd., which held that Section 9 of the IBC cannot be set to be a suit relating to accounts and that Article 137 of the Limitation Act applies.

Appraisal:

• The Tribunal examined the issues of limitation and the threshold limit.
• It held that the Operational Creditor's claim of a running account was not tenable and that Article 137 of the Limitation Act applied.
• The Tribunal found that out of 234 invoices, 224 were ex-facie time-barred and the remaining 10 invoices did not meet the threshold limit.
• The Tribunal also held that the emails relied upon by the Operational Creditor did not constitute an acknowledgment of debt.

Conclusion:

• The Tribunal dismissed the appeal, upholding the dismissal of the insolvency petition.
• No orders were made as to the costs.

Hashtags: #Insolvency #LimitationPeriod #ThresholdLimit #IBC #OperationalCreditor #CorporateDebtor