Specific Pleadings U/S 9 Of IBC Regarding Part Payments, Supported By Written Acknowledgment Resets Limitation Period: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that when there are specific pleadings under Section 9 of the IBC regarding part payments made by the Corporate Debtor, further supported by a written acknowledgment in the reply to the demand notice, the limitation period for filing the application is reset in terms of Section 19 of the Limitation Act. The present appeal has been filed under section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against an order passed by National Company Law Tribunal (NCLT) by which it admitted an application under section 9 of the IBC. The Appellant submitted that the principal amount being Rs.16,77,1.7,732.21/- having already been paid, no amount is due on the CD and the Appellant is not under any obligation to pay any further amount. The claim raised by the Bank for paying fee of the Counsel and interest is unfounded. Per contra, the Respondent submitted that amount under the two Invoices dated 03.10.2016 and 05.10.2016 became due on 31.01.2017 and 05.02.2017, but the CD had made part payments on 15.05.2017 and 26.09.2017 to the Operational Creditor, which is clear acknowledgement on the part of the CD extending the period of limitation for further period of three years from the date of part payments. The Tribunal noted that it is an admitted case of the Appellant that part payments were made on 15.05.2017 and 26.09.2017. Further, it is even in the reply to the demand notice, as noted above the Appellant has made a submission that amount was paid to the SBI. Thus, when the amount is directly paid to the creditor and there is acknowledgement in writing the conditions as provided in Section 19 are fulfilled. It further observed that there are specific pleadings under section 9 of the IBC with respect to two part payments which is further supported by a written acknowledgement of the corporate debtor in reply to the demand notice. Thus, the requirements under section 19 of the Limitation Act are satisfied in this case. Furthermore, if the time period during Covid as per the Supreme Court's judgment is excluded, the present petition was filed within limitation. The Tribunal held that the invoices raised do not contain any clause for interest. There was also no agreement between the parties as to the payment of interest. Hence, the Operational Creditor was not entitled to claim interest on the Operational Debt. It concluded that “the Appellant paid the principal amount to the SBI even prior to hearing of the Appeal and passing an interim order on 27.09.2023.Thus, the present is a case where principal amount has already been paid. The SBI was not entitled to include any interest in the principal amount. Thus, the entire principal debt stands liquidated.” Accordingly, the present appeal was allowed. Case Title: Paresh K. Mehta Investment Pvt. Ltd. Versus State Bank of India & Anr. Case Number: Company Appeal (AT) (Insolvency) No.1197 of 2023 Judgment Date: 18/08/2025 Click Here To Read/Download The Order

Specific Pleadings U/S 9 Of IBC Regarding Part Payments, Supported By Written Acknowledgment Resets Limitation Period: NCLAT

Mohd Malik Chauhan

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