# In the matter of Cdigital Arts & Crafts Private Limited C.P. 4427-IB-MB-2019

> NCLT judgment dated 2023-05-12. Citation: TCN-2023-NCLT-03379. Haren Sanghvi & Associates, an operational creditor, filed a company petition under Section 9…

- **Court:** NCLT
- **Order date:** 12 May 2023
- **Citation:** TCN-2023-NCLT-03379
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cdigital-arts-crafts-private-limited-cp-4427-ib-mb-2019-6bee14e7

## Summary

### Background

Haren Sanghvi & Associates, an operational creditor, filed a company petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against CDigital Arts & Crafts Private Limited, the corporate debtor, for a resolution of operational debt amounting to Rs. 37,07,175. The operational creditor provided accounting and management advisory services to the corporate debtor and raised invoices for the same, which remained unpaid. The corporate debtor failed to make payments despite numerous emails and a demand notice.

## Facts

Haren Sanghvi & Associates, a Chartered Accountancy firm, provided accounting and management advisory services to CDigital Arts & Crafts Private Limited. The services were provided during the financial years 2016-2017, 2017-2018, and 2018-2019. The Operational Creditor raised six invoices for these services, with payment due within 10 days of receipt. The Corporate Debtor failed to make any payments towards these invoices, even beyond the due dates. The invoices included fees for VAT appeals for FY 2007-2008, FY 2010-2011, and VAT assessment orders for FY 2009-2010, as well as assessment orders for FYS 2007-08, 2009-10, 2010-11 and 2011-12. The Operational Creditor also claimed MSME interest amounts payable as of 31/03/2017, 31/03/2018, and 31/03/2019. The

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## Issues and analysis

### Issue 1: Whether the Company Petition is barred by the law of limitation under Section 238A of the …

**Ratio:** The limitation period for filing an application under Section 9 of the IBC is three years

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**Reasoning:** The tribunal noted that the invoices were issued between 21.07.2016 and 20.02.2017. The

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**Interpretation:** Section 238A of the IBC, read with Article 137 of the Limitation Act, sets the

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**Application:** The tribunal applied the ratio to the facts by considering the dates of the

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## Parties

- **Judges:** Kuldip Kumar…; Prabhat…
- **Appellants:** Haren Sanghvi &…
- **Respondents:** CDigital Arts &…

## Timeline

- **2016-01-01 — Emails S…**: The Applicant sent numerous emails during the period of 2016 to 2019, to the Corporate…
- **2016-07-21 — Invoice No.11…**: Invoice No.113/16-17 dated 21/07/2016 for filing an Appeal before Dy. Commission of Sales…

## 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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