Uploading Debt Details On Information Utility Does Not Extend Limitation For CIRP: NCLAT

The National Company Law Appellate Tribunal at Delhi on Thursday observed that merely uploading financial information on an information utility does not amount to acknowledgment of debt and therefore cannot trigger a fresh limitation period for filing a Corporate Insolvency Resolution Process application under Section 9 of the Insolvency and Bankruptcy Code.

The Bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra dismissed an appeal filed by Air Wave Technocrafts Private Limited against Voltas Limited, holding that Voltas had never admitted the liability in a manner recognised under the Limitation Act.

It observed, "When we look at the material placed on record before us, it becomes clear that the Corporate Debtor had not acknowledged or admitted the financial record contained in the IU to the NeSL and that is why the debt has been treated as “deemed to have been authenticated”. IUs like the NeSL ensure neutrality and integrity of data, making information readily available for stakeholders in the insolvency process, but the act of storing or retrieving such information does not automatically extend the limitation period under the Limitation Act, 1963."

It added, "The mere recording or submission of financial information on the IU does not automatically extend the limitation period under the Limitation Act, 1963. When the Corporate Debtor did not formally admit or acknowledge the debt shown on the IU, it cannot be said that the date of registering debt on the IU can trigger the counting the fresh period of limitation. It is therefore misplaced on the part of the Operational Creditor to contend that as they had registered the financial record of the Corporate Debtor on the IU, that would give rise to fresh period of limitation."

The case arose from a Section 9 application (CIRP) filed by Air Wave, which had been engaged by Voltas Limited to provide operation and maintenance services for HVAC systems at Voltas's various client sites. These included locations such as Rashtrapati Bhawan, MGF Mega City, IIT Delhi, Tata Power, Jubilant and other installation sites between 2010 and 2019.

Air Wave claimed that dues amounting to Rs 1.20 crore remained unpaid and argued that limitation stood extended through a part payment made by Voltas in February 2021, certain email exchanges in 2022, and the registration of financial information with NeSL in 2023.

It contended that its invoices formed part of a running account with Voltas and that the 2021 part payment revived limitation for all outstanding invoices, keeping its Section 9 filing within time. It further relied on Voltas's emails that discussed Rs 15.03 lakh to argue that these amounted to acknowledgment of the debtor–creditor relationship, and asserted that the “deemed authenticated” status of the IU record should be treated as acknowledgment by the debtor.

Voltas disputed these claims, stating that the invoices related to separate and unrelated work orders issued over the years and that each invoice carried its own limitation period. It argued that the 2021 part payment related only to specific invoices and could not extend limitation for all others. Voltas pointed out that it had consistently raised disputes regarding missing documentation, including attendance records, wage registers, PF and ESIC challans and certified invoices, and described the overall claim of Rs 1.20 crore as incorrect and time-barred.

Upholding the NCLT Mumbai's dismissal, the tribunal held that the Section 9 application was filed well beyond the three-year limitation period for initiating CIRP. Even taking the 2021 part payment as the starting point, the limitation period would have expired in February 2024, whereas the Section 9 petition was filed in August 2024.

The tribunal also noted that Voltas had acknowledged liability only for Rs 15.03 lakh and had disputed all other amounts. On the IU record, it held that “it is therefore misplaced on the part of the Operational Creditor to contend that as they had registered the financial record of the Corporate Debtor on the IU, that would give rise to fresh period of limitation.”

Finding the Section 9 petition time-barred and also noting clear pre-existing disputes reflected in emails and the reply to the demand notice, the tribunal dismissed the appeal and affirmed the NCLT's order.