# In the matter of Rathi Ispat Ltd. IB-633-(ND) -2018

> NCLT judgment dated 2020-09-07. Citation: TCN-2020-NCLT-00693. M/s Paragon Ceramics filed an application under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 7 Sept 2020
- **Citation:** TCN-2020-NCLT-00693
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rathi-ispat-ltd-ib-633-nd-2018-06cd13ce

## Summary

### Background

M/s Paragon Ceramics filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Rathi Ispat Ltd. for a default of Rs. 27,97,788, including interest, related to goods supplied. The applicant claimed that the respondent failed to settle the outstanding amount. The applicant had previously filed a recovery suit against the respondent, which resulted in a decree in favor of the applicant. The respondent raised objections, including the maintainability of the application, the validity of the demand notice, and the claim being barred by limitation. The respondent also stated that Punjab National Bank had taken possession of the company's assets under the SARFAESI Act.

## Facts

M/s Paragon Ceramics (the applicant) supplied basic and high-temperature refractory items to M/s Rathi Ispat Ltd. (the respondent) on various dates, resulting in an outstanding amount of Rs. 27,97,788, including interest. The applicant sent a legal notice to the respondent on 14.12.2009, demanding payment of Rs. 16,39,935 with 16% interest per annum. The applicant issued a letter on 24.03.2010 for the issuance of 'C' FORM for the financial year 2006-07, which the respondent denied, stating the company was closed since October 2007. The applicant filed a suit for recovery against the respondent, which resulted in a decree in favor of the applicant on 26.09.2016. The applicant then filed an execution application, to which the respondent objected, claiming that Punjab

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## Issues and analysis

### Issue 1: Whether the application filed by the applicant is barred by limitation under the Insolvency and …

**Ratio:** The principle that the date of default is the relevant date for computing the period of

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**Reasoning:** The Tribunal reasoned that the claims of the applicant are barred by the Limitation Act,

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**Interpretation:** The legal issue revolves around the interpretation of the limitation period

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**Application:** The Tribunal applied the principle that the date of default is the relevant

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## Parties

- **Judges:** SHRI. P.S.N.…; V.K. SUB…
- **Appellants:** M/s Paragon…
- **Respondents:** M/s Rathi Ispat…
- **Advocates:** Gaurav…; Punit V…; +1 more

## Timeline

- **2007-10-01 — Respondent Com…**: Respondent company stand idle since October, 2007 when Punjab National bank being head of…
- **2007-12-28 — Possession…**: Punjab National Bank have taken over possession of all assets of the company vide…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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