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of <h1>Tribunal extends limitation period in Insolvency Code case, allows appeal against dismissal.</h1> <h3>Rajmee Power Construction Limited Versus M/s. Jharkhand Urja Sancharan Nigam Limited</h3> Rajmee Power Construction Limited Versus M/s. Jharkhand Urja Sancharan Nigam Limited - TMI Issues Involved:1. Limitation period applicability under Section 9 of the Insolvency and Bankruptcy Code, 2016.2. Determination of 'date of default' for the purpose of limitation.3. Impact of internal notings and part payments on the limitation period.4. Relevance of the challenge to the Arbitral Award and its dismissal on limitation.Detailed Analysis:1. Limitation Period Applicability under Section 9 of the Insolvency and Bankruptcy Code, 2016:The primary issue in this case revolves around the applicability of the Limitation Act, 1963 to proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Appellant’s application was dismissed by the Adjudicating Authority on the grounds of being time-barred. The Tribunal reiterated the Supreme Court’s stance from 'B.K. Educational Services Pvt. Ltd. v. Parag Gupta and Associates' that applications under IBC are subject to the Limitation Act, specifically Article 137, which prescribes a three-year limitation period from the date of default.2. Determination of 'Date of Default' for the Purpose of Limitation:The Tribunal had to ascertain the correct 'date of default' to determine if the application was within the limitation period. The Appellant argued that the date of default should be considered from the date they gained knowledge of the default, which was on 06.08.2016, through an RTI response. The Respondent, however, contended that the default date was 14.02.2008, the date of the Arbitral Award, which was also mentioned in the Section 8 Notice and the application under Section 9 of the Code.3. Impact of Internal Notings and Part Payments on the Limitation Period:The Tribunal examined whether internal notings and part payments could impact the limitation period. The Appellant presented evidence of internal notings and a cheque issued in 2016 as acknowledgments of debt. The Tribunal noted that the part payment made on 31.03.2016 extended the limitation period as per Section 19 of the Limitation Act, 1963. The Tribunal also referenced the Supreme Court’s decision in 'Dena Bank (now Bank of Baroda) v. C. Shivakumar Reddy & Anr.' which held that a fresh right to recover arises upon the issuance of a recovery certificate or part payment.4. Relevance of the Challenge to the Arbitral Award and its Dismissal on Limitation:The Tribunal considered the impact of the challenge to the Arbitral Award and its subsequent dismissal on the limitation period. The Appellant argued that the limitation period should start from 06.10.2018, the date when the challenge to the Arbitral Award was dismissed, making the recovery final. The Tribunal agreed, noting that the dismissal of the challenge to the Arbitral Award on 06.10.2018 gave rise to a fresh cause of action, and the application filed on 04.06.2019 was within the three-year limitation period.Conclusion:The Tribunal concluded that the application was not barred by limitation. It held that the relevant date for the accrual of the right to sue was 06.08.2016, when the Appellant gained knowledge of the default through the RTI response. Additionally, the part payment made on 31.03.2016 further extended the limitation period. The Tribunal allowed the appeal, set aside the Impugned Order, and directed the Adjudicating Authority to proceed in accordance with the law.
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