# In the matter of G.L. Shoes vs. Action Udhyog Private Limited Company Appeal (AT)(Insolvency) No. 846 of 2022

> NCLAT judgment dated 2023-05-24. Citation: TCN-2023-NCLAT-00501. The appeal was filed by M/s. G.L. Shoes, the Operational Creditor, against an order dated…

- **Court:** NCLAT
- **Order date:** 24 May 2023
- **Citation:** TCN-2023-NCLAT-00501
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/gl-shoes-vs-action-udhyog-private-limited-company-appeal-77fd8395

## Summary

### Background

The appeal was filed by M/s. G.L. Shoes, the Operational Creditor, against an order dated 06.06.2022 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench, Court-II) in CP(IB) No. 345(NB)/2020. The Adjudicating Authority had dismissed the Section 9 application filed by the Operational Creditor seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Action Udhyog Private Limited, on the grounds that the application was barred by limitation.

## Facts

M/s. G.L. Shoes (Operational Creditor/Appellant) supplied footwear and related products to Action Udhyog Private Limited (Corporate Debtor/Respondent) based on purchase orders. Invoices stipulated payment within 75 days of the invoice date. Goods were supplied between April and June 2016, with payment falling due on 08.07.2016. The Operational Creditor issued a demand notice to the Corporate Debtor on 02.07.2019, demanding Rs. 22.26 lakhs as unpaid operational debt, including interest at 18% per annum. The Corporate Debtor did not issue any notice of dispute. The Operational Creditor filed a Section 9 application before the Adjudicating Authority. The Corporate Debtor allegedly acknowledged the debt in an email dated 05.05.2017. The Section 9 application was filed on

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## Issues and analysis

### Issue 1: Whether an email dated 05.05.2017 from the Corporate Debtor, with an attached statement of …

**Ratio:** Section 18 of the Limitation Act, 1908 requires that an acknowledgment of debt must be in

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**Reasoning:** The court reasoned that the main body of the email did not contain any explicit

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**Interpretation:** The court interpreted Section 18 of the Limitation Act strictly, requiring

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**Application:** The court applied the ratio to the facts by finding that the email and its

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** M/s. G.L.…
- **Respondents:** Action Udhyog…; M/s. Action…

## Timeline

- **2016-04-01 — Goods Sup…**: Goods were supplied…
- **2016-07-08 — Payment Du…**: Payment fell due on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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