TaxTMI 
TaxTMI 
2026 (5) TMI 519
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....he plaintiff on July 29, 2020 had instituted a proceeding under Section 9 of IBC before the Jurisdictional National Company Law Tribunal (hereinafter, NCLT). 5. On September 10, 2023 (at page 220) of the application NCLT dismissed the said Section 9 application by holding that there are pre-existing dispute between the parties. The relevant observation from the order is quoted below:- "In view of the above facts and circumstances, we find that there was a pre-existing dispute between the parties and hence the present petition shall be rejected on this ground alone. Consequently, CP (IB) No. 841/KB/2020 shall stand rejected. Needless to say, the operational creditor is free to pursue its remedies under any other law and the dismissal of the present petition shall not stand in the way of such pursuit of remedies." 6. Thereafter, the plaintiff had filed the instant suit and prays for the benefit under Section 14 of the Limitation Act, 1963. Submissions: 7. Mr. Sourojit Dasgupta, learned Advocate appearing for the plaintiff referring to the provision under Section 9 of IBC submits the adjudicating authority shall within 14 days of receipt an application un....
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....e Court In the matter of India Electric Works Vs. James Mantosh reported at (1971) 1 SCC 24. 12. Learned Advocate then submits that there is a difference between sub-Section (1) and sub-Section (2) to Section 14 of the Limitation Act. Under sub-Section (1) both the proceedings shall have the same matter in issue whereas under sub-Section (2) both the proceedings shall be for the same relief. Sub-Section (1) specifically provides that the subsequent proceeding shall be a suit whereas sub-Section (2) provides that the subsequent proceeding shall be an application. He submits that the provision under sub-Section (2) of Section 14 of the Limitation Act shall not apply in the present case, since the sub-sequent proceeding is not an application and both the proceedings are not for same relief. The proceeding under IBC is primarily for revival or resolution of a company, whereas in a suit the proceeding is for recovery of debt. 13. Learned Advocate has relied upon a decision of the Hon'ble Supreme Court In the matter of: Sesh Nath Singh vs. Baidyabati Sheoraphuli reported at (2021) 7 SCC 313 to submit that proceeding under IBC is ultimately for recovery of debt, however, it cannot b....
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....ll 12th December 2024 is liable to be excluded due to the mediation proceeding initiated by the plaintiff. During the total period from 29th October 2019 till filing of the suit on 15th December 2025, there has been a delay of about 982 days. 19. Unless the said delay is condoned and the instant plaint is accepted to be filed within the period of limitation, the plaintiff shall be non-suited without having any fault or latches on its part and the plaintiff shall suffer irreparable loss, prejudice and injury. 20. The plaint should be accepted by applying Section 14 (1) of the Limitation Act. Decision : 21. The core issue needs to be decided is whether the provisions laid down under Section 14 of the Limitation Act, 1963 shall apply in the facts and circumstance of this case where the previous proceeding was filed under Section 9 of IBC and the sub-sequent proceeding is the instant civil suit. 22. For convenience Section 14 of the Limitation Act provides for exclusion of time of proceeding bona fide in Court without jurisdiction and is reproduced below:- "14. Exclusion of time of proceeding bona fide in Court without jurisdiction:- (1) In computing th....
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.... excluded, where the proceeding relates to the same matter in issue and the proceeds in good faith which, for defect of jurisdiction or other cause of like nature, is unable to entertain it. Thus, the tests require to be examined for applicability of Section 14(1) should be :- a) The subsequent proceeding must be a suit; b) Both the previous and sub-sequent proceeding must be civil proceeding; c) Both the previous and sub-sequent proceeding must be between the same parties; d) The previous and sub-sequent proceeding must have the same matter in issue; e) The previous proceeding must have failed owing to defect of jurisdiction of previous Court or any other cause of like nature; f) The previous proceeding must have been prosecuted in good faith and with due diligence and g) Both the previous and the sub-sequent proceeding must be before a Court. 25. Sub-Section (2) to Section 14 under the similar circumstance and stipulation, as stipulated under Sub-Section (1) to Section 14, relates to application and not a suit. The another difference in expression that under sub-Section (1), the sub-sequent proceeding being the sui....
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....rred. Section 238-A of IBC inter alia provides that the provisions of the Limitation Act, 1963 shall, as far as may be, apply to the proceeding or appeal before the adjudicating authority and other relevant for a mentioned thereunder. The expression used under the said provision of IBC is significant. It says that the provisions of the Limitation Act shall apply to the proceedings, as far as may be. Section 238-A of IBC imposes an overriding effect to IBC, notwithstanding anything inconsistent therewith contained in any other law, for the time being in force, or any instrument having effect, by virtue of any such law. There is no specific period of limitation prescribed under the Limitation Act, 1963 for an application filed under IBC. Consequently Article 137 of the Limitation Act applies. It is also noteworthy and significant that IBC does not excluded the application of Limitation Act, 1963 to proceedings under IBC, but shall be applicable as far as may be to extent feasible. 29. Section 14 of the Limitation Act is to be read as a whole and in a liberal manner, as far as possible, to advance the cause of justice. A conjoint, meaningful and harmonious reading of the three sub-....
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.... time between the initiation and termination of the proceedings instituted bona fide and in good faith and prosecuted with due diligence, an application was still beyond three years, Section 14 would not help save limitation. 81. To cite another example, if civil proceedings were initiated in a wrong forum in good faith and prosecuted with due diligence, but after the proceedings ended, time was wasted by making frivolous, meritless applications, the applicant would only be entitled to exclusion of time from the date of initiation till the end of the proceedings initiated in good faith and bona fide and pursued diligently, and no more. The applicant would not be entitled to exclusion of any further time spent in pursuing frivolous further proceedings, or otherwise. 82. To sum up, Section 14 excludes the time spent in proceeding in a wrong forum, which is unable to entertain the proceedings for want of jurisdiction, or other such cause. Where such proceedings have ended, the outer limit to claim exclusion under Section 14 would be the date on which the proceedings ended." 31. The important expression used under sub-Section (1) to Section 14 of the Limitation Act....
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....t petition was not dismissed by the High Court on the ground of defect of jurisdiction. However, Section 14 of the Limitation Act is wide in its application, inasmuch as it is not confined in its applicability only to cases of defect of jurisdiction but it is applicable also to cases where the prior proceedings have failed on account of other causes of like nature. The expression 'other cause of like nature' came up for the consideration of this Court in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi and it was held that Section 14 of the Limitation Act is wide enough to cover such cases where the defects are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right." 51. Similarly, in India Electric Works Lid. v. James Mantosh, this Court held: (SCC pp. 28-29, para 7) "7. It is well settled that although all questions of limitation mu....
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....xpands the scope of the section. We have already noticed that the India Electric Works Ltd. judgment has held that strictly speaking misjoinder of parties or of causes of action can hardly be regarded as a defect of jurisdiction or something similar to it. Therefore properly construed, Explanation (a) also confers a benefit and does not by a side wind seek to take away any other benefit that a purposive reading of Section 14 might give. We, therefore, agree with the decision of the Madhya Pradesh High Court that the period from the cause of action till the institution of appellate or revisional proceedings from original proceedings which prove to be abortive are also liable to exclusion under the section. The view of the Andhra Pradesh High Court is too broadly stated. The period prior to institution of the initiation of any abortive proceeding cannot be excluded for the simple reason that Section 14 does not enable a litigant to get a benefit beyond what is contemplated by the section that is to put the litigant in the same position as if the abortive proceeding had never taken place." 33. The law is also settled that the expression Court used in Section 14(1) of the Limitation....