Tribunal holds that consolidated invoice spanning two years is contrary to contract terms; only recent dues fall within limitation but below IBC threshold, leading to dismissal of petition
In a significant ruling dated August 31, 2026, the National Company Law Tribunal (NCLT), Ahmedabad Bench, dismissed the Corporate Insolvency Resolution Process (CIRP) application filed by M/s Kothamangalam Aggregates Prestressed Concrete Industries against ACC Limited. The petition, filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, sought initiation of insolvency proceedings for an alleged default of Rs. 1.90 crore related to the hiring of transit mixers.
The dispute arose out of an agreement dated June 21, 2019, under which Kothamangalam Aggregates was to supply six transit mixers to ACC Limited's Kochi plant for three years. The contract stipulated fixed monthly charges per transit mixer and required invoicing on a weekly or twice-monthly basis, with payment due within 30 days of invoice submission.
The operational creditor issued a consolidated invoice on September 28, 2022, covering charges from September 2020 to August 2022, and promptly served a demand notice under Section 8 of the IBC on September 29, 2022. ACC Limited contested the claim, arguing that the demand notice was premature as payment under the September 28 invoice was not due until October 28, 2022. Further, ACC contended that the consolidated invoice breached the contractual terms requiring periodic invoicing and that earlier dues had been settled through monthly invoices up to May 2021.
The tribunal examined the contractual provisions and communications, noting that invoices raised for the period September 2020 to July 2022 were time-barred under the Limitation Act, 1963, since the petition was filed nearly three years later on September 17, 2025. The only invoice within limitation pertained to August 1-20, 2022, amounting to Rs. 5.88 lakh, which fell below the minimum threshold for initiating insolvency proceedings under Section 4 of the IBC.
The tribunal also rejected the operational creditor's reliance on alleged acknowledgment of debt by ACC in response emails, observing that ACC had clearly denied liability and that such denial cannot be construed as acknowledgment under Section 18 of the Limitation Act.
Further, the tribunal highlighted that no extension or condonation of delay is permissible for fresh petitions under the Limitation Act, emphasizing the statutory bar on claims beyond the prescribed period.
Consequently, the NCLT held that the petition was not maintainable due to non-compliance with mandatory provisions of Sections 8 and 9 of the IBC and dismissed the application with cost implications.
This decision reinforces the requirement for operational creditors to adhere strictly to contractual invoicing terms and limitation timelines before initiating insolvency proceedings, thereby preventing misuse of the IBC framework.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Application under Section 9 for initiation of Corporate Insolvency Resolution Process (CIRP) - Petition rejected as not maintainable due to time-barred claims and non-fulfillment of mandatory requirements of Sections 8 and 9 of IBC.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 4, 8, 9; Limitation Act, 1963 Sections 3, 5, 18
M/s.Kothamangalam Aggregtes v. ACC Limited, (NCLT)(Ahmedabad) : Law Finder Doc Id # 2972652
