Haabia Resources Pvt. Ltd Vs Vidyut Metallics Pvt. Ltd (NCLAT Delhi)
The appeal before the National Company Law Appellate Tribunal (NCLAT), Delhi, challenged an order dated 21.03.2025 of the Adjudicating Authority rejecting a Section 9 application under the Insolvency and Bankruptcy Code, 2016 (IBC) on the ground of limitation. The Adjudicating Authority held that the application was barred by time under Article 137 of the Limitation Act, read with Section 238A of the IBC.
The Operational Creditor’s claim arose from MSME Council arbitral awards dated 26.02.2011. These awards were challenged by the Corporate Debtor before the City Civil Court, Hyderabad, which dismissed the challenges on 05.03.2012. Subsequent appeals before the Andhra Pradesh High Court were dismissed on 30.01.2013. The Corporate Debtor approached the Supreme Court, but the appeal was withdrawn on 11.03.2013. Consequently, the arbitral awards attained finality and became operative by March 2013.
Despite this, the Operational Creditor filed the Section 9 application only on 23.03.2022. The Adjudicating Authority held that proceedings under the IBC are not in the nature of execution of decrees and that Article 137 of the Limitation Act, providing a three-year limitation from the date when the right to sue accrues, applies. Since the awards had attained finality in 2013, the application filed in 2022 was held to be hopelessly time-barred.
