Operational Creditor is not entitled for benefit of Section 14 of the Limitation Act where the Suit filed by Operational Creditor was withdrawn on its own application without any liberty to institute a fresh suit – GRI Towers India Pvt. Ltd. Vs. Inox Wind Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that: (i) Suit was withdrawn without any liberty from the Court to institute a fresh proceeding and termination of suit cannot be held on ground of defect of jurisdiction on cause of like nature. (ii) The proceedings under IBC are not proceedings for recovery of contractual dues, as is apparent from the facts of the present case the Operational Creditor has initiated proceeding for recovery of its contractual dues arising out of contract between the parties. Suit for recovery of dues was already filed by the Operational Creditor which was withdrawn by the Operational Creditor. (iii) It is, however, relevant to notice that withdrawal of the suit was not on the ground contended by the Operational Creditor nor any liberty was granted by the Civil Court to institute a fresh suit nor Operational Creditor at any point of time resorted to the proceeding of arbitration which according to the Operational Creditor was reason for withdrawal of suit. (iv) Upheld decision of the NCLT Chandigarh Bench.

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If any Public depositor applies showing due of the debt claiming itself as operational creditor and the Resolution Professional or the Tribunal do not accept the claim on the ground that they are not financial creditor, we allow the appellant to raise the question before the Tribunal and if any adverse decision is given by the Tribunal, it will be open to the appellant to raise the issue before NCLAT- Hind Motors India Ltd. Vs. Adjudicating Authority NCLT, Chandigarh – NCLAT New Delhi

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