Supreme Court overturns NCLAT decision, stresses Section 18 Limitation Act

The Supreme Court allowed the appeal, set aside NCLAT's order, and remanded the matter for a fresh consideration, emphasizing the need to thoroughly analyze the applicability of Section 18 of the Limitation Act.

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Issues:
- Appeal against NCLAT's order holding application under Section 9 of the Insolvency and Bankruptcy Code, 2016 as barred by limitation.

Analysis:
1. The appellant, an operational creditor, filed an application under Section 9 of the Code against a corporate debtor, claiming non-payment for fabrics sold. The NCLT admitted the application, citing acknowledgment of liability by the corporate debtor.
2. The NCLAT, on appeal, found that the debt arose in 2013, and the cheques issued in 2017 did not save limitation. The NCLAT reversed NCLT's decision, dismissing the application.
3. However, the NCLAT overlooked a crucial letter dated 28.09.2015, which contained details matching the allegedly lost cheques. The failure to consider this vital aspect led to the appeal being allowed.
4. The Supreme Court highlighted the settled law on the applicability of Section 18 of the Limitation Act, emphasizing the need for a fresh consideration by NCLAT based on established legal principles.
5. The Court referenced previous cases to clarify the application of Section 18, emphasizing the importance of examining all relevant circumstances. The lack of such examination by NCLAT necessitated setting aside their order for a fresh review.

In conclusion, the Supreme Court allowed the appeal, set aside NCLAT's order, and remanded the matter for a fresh consideration, stressing the need to analyze the applicability of Section 18 of the Limitation Act thoroughly.

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