TaxTMI 
TaxTMI 
2017 (11) TMI 1524
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....Insolvency Resolution Process under the Code against this Corporate Debtor, hence this Petition. 2. Looking at the facts of the case, we have ascertained that the Petitioner sent Section 8 notice for two invoices dated 31.07.2014 and 16.09.2014 for payment, since this Petitioner has not received the aforesaid amounts, the Petitioner filed this Petition on 22.08.2017 u/s 9 of Code, by the time one of the invoices raised on 31.07.2014 was time barred. 3. Therefore, now the point to be decided is as to whether or not this petition should be admitted u/s 9 when one of the invoices is time barred by the time Company Petition filed. 4. Before going into facts of the case, this Bench is obliged to say that it is general and settled proposition that prosecuting party cannot seek remedy over time barred debt. For one of the invoices is time barred, to get over this point, the Petitioner's Counsel Mr. Sam Kapadia relied upon a judgment passed by Hon'ble National Company Law Appellate Tribunal (NCLAT) in Neelkanth Township and Construction (P.) Ltd. v. Urban Infrastructure Trustees Ltd. (Company Appeal 44/2017 dt. 11-08-2017), by placing para 24, which is as follows: "The next ground tak....
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....rred is not accepted. Meaning thereby, the reason given by the Appellate Authority to turn down the plea that claim is time barred is not by saying Limitation Act is not applicable but by saying the claim is saved by limitation because it is a continuous course of action. This Bench need not separately say that reason given to a decision alone will become ratio, but not a statement not leading to a decision in any adjudication. 8. Yes, it is obviously not a Code meant for recovery of money claims, but for initiation of Insolvency Resolution Process. Here, the point to remember is for recovery of money, the cause of action is existence of debt and occurrence of default, likewise for filing case under I & B Code, cause of action is existence of debt and occurrence of default- same as that of recovery of money. This must be the reason for legislature to miss out limitation aspect in the Code - in the code it has not been said as either applicable or not applicable to the Code. 9. Non-mentioning of applicability of certain doctrines shall not be seen as doors open to this Bench to legislate such and such enactments are not applicable. Doctrine of limitation and prescription is such a....
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.... is debt and default, not inability in paying debts. 14. In the present dispensation, section 8 is precursor to file petition Section 9 Petition. By the time Company Petition filed u/s 9, the claim shall be within Limitation, that being the situation, the Petitioner today cannot take out an argument that by the time notice given u/s 8, since both the invoices upon which claim raised are within Limitation, therefore, even if one of the invoices claimed is time barred, by taking other invoice in limitation into consideration, claim against both the invoices shall be considered as within limitation for filing petition under section 9 of the Code. 15. Since debt u/s 8 shall be crystallized by the time notice u/s 8 given, such debt crystallized by the time notice given u/s 8 shall also remain within limitation by the time petition filed u/s 9 of the Code. But here, part of the debt that is within limitation by the time notice given u/s 8 has become time barred by the time case filed u/s 9 of the Code. The Petitioner has included time barred claim along with another claim within limitation in the petition filed u/s 9, solely on the assumption since both the invoices claims were within ....
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.... under Companies Act 1956, which is in pari materia to second stage in the Code, therefore we don't find any logic to say that Limitation Act is not applicable to Insolvency and Bankruptcy Code. 20. If we read Limitation Act, it is a general enactment governing right of remedy - right for recovery of money claim is prescribed as three years. The period begins running since debt has come into existence or as agreed between persons, likewise default is also being defined on such terms as agreed or as prescribed under Limitation Act. When such is the computation for recovery of debt, for there being no other computation prescribed for filing Insolvency Petition, to give effect to public policy of giving certainty to controversy, and having non-payment of debt being cause of action to file insolvency petition, the same computation of limitation applied for recovery is applicable to insolvency petition. It is also pertinent to mention that no new right has been carved out under I & B Code, the remedy that was available under old Companies Act is made available in a modified version under new dispensation, therefore there is no merit to say that since it is a new enactment, period of li....