Mediation Order And Dishonoured Cheque Does Not Imply Extension Of Limitation U/S 9, IBC: NCLAT, Delhi
LIVELAW NEWS NETWORK
13 Feb 2022 1:40 PM GMT
The NCLAT, Delhi in a Bench comprising of Justice Ashok Bhushan (Chairperson), Dr. Ashok Kumar Mishra and Dr. Alok Srivastava (Technical Members) in the case of Ravi Iron Ltd. v. Jia Lal Kishori Lal & Ors. held that an order of mediation along with dishonoured cheques does not imply an extension of limitation for the purposes of Section 9 of the Insolvency and Bankruptcy...
The NCLAT, Delhi in a Bench comprising of Justice Ashok Bhushan (Chairperson), Dr. Ashok Kumar Mishra and Dr. Alok Srivastava (Technical Members) in the case of Ravi Iron Ltd. v. Jia Lal Kishori Lal & Ors. held that an order of mediation along with dishonoured cheques does not imply an extension of limitation for the purposes of Section 9 of the Insolvency and Bankruptcy Code, 2016.
The Appellants/Operational Creditors filed an appeal against the order of the NCLT, New Delhi Bench which dismissed the application filed by the Appellant u/s 9 of the Code, as being time barred.
The primary contention of the Appellant was that even though the date of default is mentioned as 10.01.2008 in his application, there was District Court Mediation in 2015, wherein the Respondent/Corporate Debtor admitted his liability and the post-dated cheques issued were also dishonoured, and hence the application u/s 9 was not barred by time.
The NCLAT dismissed the appeal and upheld the order passed by the NCLT which dismissed the application filed by the Appellant as being time barred. It held-
"When the Application comes with date of default and no other reasons given in the Application or any details for extension of limitation, we see no ground to hold that Application was well within time."
"… The Mediation which was ordered on 16.11.2015 shall not give any extension of limitation to the Appellant. The purpose of Mediation and post-dated cheques are different and the fact that the cheques were dishonored may give any right to the Appellant to take appropriate proceeding but that shall not give extension of the limitation for the Application under Section 9 of the Code to make it within time."
Case Title: Ravi Iron Ltd. v. Jia Lal Kishori Lal & Ors.
Counsel for Appellant: Mr. Vipin Garg, Ms. Krishna Goel, Advocates.
