Appellate Authority (NCLAT) set aside the order of NCLT dismissing application under Section 9 of the Insolvency and Bankruptcy Code, 2016 on the ground of claim barred by limitation and existence of dispute.

M/s Gupshup Technology India Pvt. Ltd. (Operational Creditor) filed application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘I&B Code’) against ‘M/s Interpid Online Retail Pvt. Ltd.’ (‘Corporate Debtor’) which having rejected by Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench, Bengaluru by order dated 8th November, 2018, the present appeal has been preferred by the Appellant.

The Adjudicating Authority held that the claim is barred by limitation and there is existence of dispute.

Appellant states that the record of the services carried out as on 5th September, 2017 shows that the Respondent availed the services through the SMS Dashboard and had its own dedicated user name and password for logging. However, the Respondent in their email dated 5th September, 2017 sought details of email logs and other supporting documents in order to verify the invoices. 7. The Appellant issued a Demand Notice under Section 8(1) on 24th October, 2017 and for the first time the Respondent in its reply under Section 8(2) by intimation dated 3rd November, 2017 raised false and frivolous allegations After completion of more than 10 days, the Appellant filed an application under Section 9.

On notice, the Respondent has appeared and filed reply affidavit. But learned Counsel for the Respondent failed to produce before the Appellate Tribunal any letter or email to suggest that a dispute was raised about the SMS services prior to the issue of Demand Notice dated 24th October, 2017.

Therefore it is held by the Appellate Authority t that the Respondent has not disputed that the Appellant has provided text SMS services to the Respondent through internet. The Respondent has availed the services pursuant to the contract in question from time to time till the Appellant terminated the services.

By referring to the decision of the Hon’ble Supreme Cour in the matter “Innoventive Industries Ltd. Vs. ICICI Bank and Ors. – (2018) 1 SCC 407”, it is clear that Section 3(6) defines “claim” to mean a right to payment even if it is disputed. The Code gets triggered the moment default of Rs.1 lakh or more (Section 4) occurs.

So far as limitation is concerned, for filing an application under Section 9, Article 137 of Part II of Third Division of Limitation Act, 1963 is applicable, which reads as follows: - 

PART II – OTHER APPLICATIONS 

Description of application

Period of limitation

Time for which period being to run

137. Any other application for which no period of limitation is provided elsewhere in this division.

Three years Where the right to apply accrues From the aforesaid provision of the Limitation Act, it is clear that the application is maintainable within three years from the date when the right to apply accrues. Since, the Insolvency and Bankruptcy Code, 2016 has come into effect since 1st December, 2016, Appellate Authority  hold that the application is not barred by limitation.

Therefore Appellate Authority set aside the impugned order dated 8th November, 2018 and remit the case to the Adjudicating Authority for passing appropriate order taking into consideration the records submitted by the Appellant in the light of decision of Hon’ble Supreme Court in “Innoventive Industries Ltd. Vs. ICICI Bank and Ors.”, after notice and hearing the Respondent.