Ahio Overseas LLP Vs Gokal Iron & Hardware Traders (LDH) (NCLAT Delhi)
The appeal was filed by the Corporate Debtor challenging the order dated 9 September 2024 passed by the National Company Law Tribunal, Chandigarh Bench, admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor’s application sought recovery of Rs. 1,71,28,172/-, comprising a principal amount of Rs. 84,88,307/- and interest of Rs. 86,39,865/- calculated from 9 November 2016 to 30 June 2020.
The appellant argued that the Section 9 application was barred by limitation. The Operational Creditor issued a demand notice on 30 June 2020 and filed the application on 6 May 2021, mentioning 30 November 2018 as the date of default. The Tribunal had relied on invoice no. G-9 dated 29 November 2018, raised by the Corporate Debtor for goods sold on credit, to conclude that limitation began on 30 November 2018. The appellant contended that the last invoice raised by the Operational Creditor was invoice no. 287 dated 7 November 2016 relating to the sale of acrylic yarn and that interest had been calculated from that date, demonstrating that 7 November 2016 was the actual date of default.
The appellant submitted that in cases where both parties sell goods to each other, the applicable limitation provision is not Article 1 of the Limitation Act, 1963, but Article 137, which prescribes a three-year period beginning when the right to apply accrues. Reliance was placed on the NCLAT decision in Laxmi Trading Corporation v. Hindustan Construction Company Ltd., which held that proceedings under Section 9 are not suits relating to accounts and therefore Article 1 is inapplicable.
