AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 890
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....rgone during pendency of the petition, filed prior to the Suit, under Section 9 of the Insolvency and Bankruptcy Code, 2016 ('IBC'), has to be excluded from computing the limitation. Liberty, therefore, had been given to the plaintiff to file an application under Section 14 of the Limitation Act, 1963. Notice was issued in the present application on 31st January 2024. 4. The brief facts in this regard are as under: (i) Defendant placed orders for supply of Seitz products from time to time. The supply was made to the defendant in India. Invoices were raised and parties made a running account. The latest invoice raised by the plaintiff against supply of goods was on 21st December 2016. On 05th July 2017, a credit-note of EUR. 90256.78/- was issued by the plaintiff, in favor of the defendant. Despite the issuance of credit note, defendant started defaulting in payments under various invoices. Plaintiff issued a demand notice dated 31st January 2018 in terms of Section 8 of IBC, which was replied to, by the defendant on 12th February 2018. (ii) On 13th March 2018, plaintiff filed an application under Section 9 of the IBC before the National Company Law Tribunal ('N....
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....ade only in Courts stricto sensu, and can also apply to proceedings before a quasi-judicial tribunal under a particular statute. 10. Further, reliance was placed on P. Sarathy v. State Bank of India (2000) 5 SCC 355, wherein it was held that Section 14 of the Limitation Act, 1963, uses the term "Court" and not "Civil Court" and could include any forum having the trappings of a Civil Court i.e. having the authority to adjudicate upon the rights of the parties. Submissions on behalf of the defendant 11. The defendant contended that the application is untenable and the exclusion, as claimed by the plaintiff, cannot be sustained. It was stressed that the captioned suit has been filed, relating to outstanding recoveries with respect to invoices of the year(s) 2014, 2015 and 2016 and limitation period, therefore, stood expired in the year(s) 2017, 2018 and 2019. 12. Defendant submitted that issuance of the credit note would not extend the period of limitation and that there was no running account. The application has been moved almost two years after registration of the suit in an attempt to make the suit maintainable. 13. It is contended that in an application under Secti....
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....ction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in Rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under Rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature. Explanation.-For the purposes of this section,- (a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted; (b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding; (c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction" (emphasis supplied) ii. Section 9 of IBC, 2016: "9. Application for initiation of corporate insolvency resolution process by operational creditor- (1) After the expiry of the....
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....ution professional proposed under sub-section (4), if any. (ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if- (a) the application made under sub-section (2) is incomplete; (b) there has been payment of the unpaid operational debt; (c) the creditor has not delivered the invoice or notice for payment to the corporate debtor; (d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or (e) any disciplinary proceeding is pending against any proposed resolution professional: Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section." (emphasis supplied) iii. Section 238A of IBC 2016: "Limitation.- The ....
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....ecessary that the court spoken of in Section 14 should be a "civil court". Any authority or tribunal having the trappings of a court would be a "court" within the meaning of this section. 13. In Thakur Jugal Kishore Sinha v. Sitamarhi Central Coop. Bank Ltd. [AIR 1967 SC 1494 : 1967 Cri LJ 1380] this Court, while considering the question under the Contempt of Courts Act, held that the Registrar under the Bihar and Orissa Cooperative Societies Act was a court. It was held that the Registrar had not merely the trappings of a court but in many respects he was given the same powers as was given to an ordinary civil court by the Code of Civil Procedure including the powers to summon and examine witnesses on oath, the power to order inspection of documents and to hear the parties. The Court referred to the earlier decisions in Bharat Bank Ltd. v. Employees [1950 SCC 470 : AIR 1950 SC 188 : 1950 SCR 459] ; Maqbool Hussain v. State of Bombay [(1953) 1 SCC 736 : AIR 1953 SC 325 : 1953 SCR 730] and Brajnandan Sinha v. Jyoti Narain [AIR 1956 SC 66 : (1955) 2 SCR 955]. The Court approved the rule laid down in these cases that in order to constitute a court in the strict sense of the t....
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....order, which was allowed while holding that CEGAT has no jurisdiction and the appeal would lie before the Commissioner (Appeals) under the Customs Act, 1962. An appeal filed before the appropriate authority was dismissed by the Commissioner of Customs, basis delay. A challenge to said dismissal was also dismissed by the Customs, Excise and Service Tax Appellate Tribunal ('CESTAT'). The Court considered the decision in P. Sarathy (supra) noting that a distinction had been made between "civil court" and "court" and the scope of Section 14 of the Limitation Act, 1963, was expanded to include any authority or tribunal having trappings of a civil court. The Court, however, went on to add a qualification that this refers only to proceedings which proved to be abortive. The Court highlighted that, proceedings, even if before a quasi-judicial tribunal, if they prove to be abortive, due to defect of jurisdiction or otherwise and where no decision could be rendered on merits, the time taken to participate in such proceedings ought to be excluded. It was made clear that civil proceedings need not be confined to suits, appeals or applications which are made only in a Court stricto sensu. The C....
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....d as otherwise the person who has approached the court in such proceeding would be penalised for no fault of his own. This judgment does not further the case of Shri Viswanathan in any way. The question that has to be answered in this case is whether suits, appeals or applications referred to by the Limitation Act are to be filed in courts. This has nothing to do with "civil proceedings" referred to in Section 14 which may be filed before other courts or authorities which ultimately do not answer the case before them on merits but throw the case out on some technical ground. Obviously the word "court" in Section 14 takes its colour from the preceding words "civil proceedings". Civil proceedings are of many kinds and need not be confined to suits, appeals or applications which are made only in courts stricto sensu. This is made even more clear by the explicit language of Section 14 by which a civil proceeding can even be a revision which may be to a quasi-judicial tribunal under a particular statute. ..... 49. The language of Section 14, construed in the light of the object for which the provision has been made, lends itself to such an interpretation. The object of....
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....xpression "the time during which the plaintiff has been prosecuting with due diligence another civil proceeding" needs to be construed in a manner which advances the object sought to be achieved, thereby advancing the cause of justice. ..... 52. As has been already noticed, Sarathy case [(2000) 5 SCC 355 : 2000 SCC (L&S) 699] has also held that the court referred to in Section 14 would include a quasi-judicial tribunal. There appears to be no reason for limiting the reach of the expression "prosecuting with due diligence" to institution of a proceeding alone and not to the date on which the cause of action for such proceeding might arise in the case of appellate or revisional proceedings from original proceedings which prove to be abortive..." (emphasis supplied) (iii) Reliance was placed on Sesh Nath Singh (supra) where the Court was dealing with an appeal under Section 62 of IBC against a judgment and order passed by the NCLAT dismissing the appeal filed against the NCLT order. An objection had been taken that the application under Section 7 IBC was barred by limitation, however, was refuted on the ground that in the interregnum, proceedings un....
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....ul reading of sub-sections (1), (2) and (3) of Section 14 makes it clear that an applicant who has prosecuted another civil proceeding with due diligence, before a forum which is unable to entertain the same on account of defect of jurisdiction or any other cause of like nature, is entitled to exclusion of the time during which the applicant had been prosecuting such proceeding, in computing the period of limitation. The substantive provisions of sub-sections (1), (2) and (3) of Section 14 do not say that Section 14 can only be invoked on termination of the earlier proceedings, prosecuted in good faith. ..... 86. An adjudicating authority under IBC is not a substitute forum for a collection of debt in the sense it cannot reopen debts which are barred by law, or debts, recovery whereof have become time-barred. The adjudicating authority does not resolve disputes, in the manner of suits, arbitrations and similar proceedings. However, the ultimate object of an application under Section 7 or 9 IBC is the realisation of a "debt" by invocation of the insolvency resolution process. In any case, since the cause of action for initiation of an application, whether under Sec....