O R D E R

(Hybrid Mode)

[ORAL JUDGMENT: Justice Sharad Kumar Sharma, Member (Judicial)] 21.04.2026:

In the instant Appeal, the Appellant, the suspended director of the Corporate Debtor M/s. Sargam Metals Pvt. Ltd., puts a challenge to the impugned order of 28.11.2024 that was passed by the Ld. NCLT Chennai Bench in CP(IB) No. 211/CHE/2022. The consequential effect of the impugned order, had been that the application preferred by the Respondent under Section 9 of the I & B Code, 2016, has been allowed and the Corporate Debtor (CD) has been put under Corporate Insolvency Resolution Process (CIRP).

2. Ld. Senior Counsel for the Appellant has submitted that, the manner in which the Ld. Tribunal has proceeded to decide the controversy qua the admission of an application under Section 9 of the Code, is absolutely preposterous and contrary to the documents on record and is based on wrongful appreciation of the evidence. He has contended that Ld. NCLT has incorrectly held that the proceedings initiated under Section 9 of the Code, at the behest of the Respondents was not barred by limitation and that, the corporate debtor had acknowledgement of liability by issuing the cheques later on and that, because these two issues have not been appropriately dealt with by the Ld. Tribunal, the impugned order stands vitiated and it deserves to be set aside by this Appellate Tribunal.

3. The facts which should be borne out from the record are the Corporate Debtor (CD), i.e., M/s. Sargam Metals Private Limited stood incorporated in accordance with the provisions of the Companies Act as back as on 25.05.1970 and it is engaged in the business of manufacturing of electrical and electronics unitized systems, semi-unitized systems and aluminium composite panel claddings. The operational creditor (OC), the respondent-1 herein, is engaged in supply of aluminium ingots, sheets, coils, and scrap and during the course of the said business, had supplied the above items to the Corporate Debtor and had raised certain invoices with the Corporate Debtor . The Corporate Debtor, in turn had made a part payment as against the said invoices, and an amount of Rs. 265 lakhs remained unpaid and outstanding thereafter, despite of repeated demands raised by the Respondent.

4. In these circumstances, the parties admittedly entered into a memorandum of understanding (MoU) on 21.07.2018, whereby the outstanding amount of Rs. 265 lakhs was converted into a fresh loan due and payable from the said date, to be repaid in instalments of at least Rs. 25 lakh every quarter starting from 01.07.2018. subsequent to the signing of MoU, the corporate debtor repaid a part amount of Rs. 46.95 lakh only as per the MoU and for the balance amount of Rs. 218.05 lakh, issued 5 (five) post-dated cheques on 16.06.2021 which on presentation got dishonoured with the remarks ‘account closed’. Subsequently, the OC issued the demand notice under Section 8 of the Code, on 22.06.2022 and thereafter, filed the application under Section 9 of the Code on 05.09.2022 as against the CD. The said application was admitted by Ld. NCLT, Chennai-II by virtue of the order dated 28.11.2024 which is impugned in the instant appeal by the Appellant.

5. It is argued by the Ld. Senior Counsel for the Appellant that the proceedings would be barred by limitation because the date of default as per MoU is 01.07.2018 as per the particulars given in part -IV of the application filed under section 9 of the Code . He states that the section 9 application should have been filed within 3 years of the said date, that is, on or before 30.06.2021 as per the Limitation Act, which got extended to 29.05.2022 on account of the exclusion granted by Hon’ble Supreme Court vide its judgement in Suo Motu WP(C) No. 03/2020. However, the section 9 application was filed on 05.09.2022 and hence it is hopelessly barred by limitation. He states that Ld. NCLT has erroneously permitted the respondent to change the date of default to 16.06.2021 by filing of