There is no termination of contract from either of the parties, therefore, the contract still subsists and the claim is within limitation – Srinivasa Reddy Velagala, Director, K.P.R. Chemicals Limited Vs. Sravanthi Infratech Pvt. Ltd. – NCLAT New Delhi

Learned Counsel for the Appellant relied upon the decision of Hon’ble Apex Court in B.K. Educational Services Pvt. Ltd. Vs. Paras Gupta & Associate, [2018] ibclaw.in 32 SC and Vashdeo R. Bhojwani Vs. Abhudaya Co-operative Bank Ltd. [2019] ibclaw.in 15 SC citing that the period of limitation for Applications seeking initiation of CIRP under Sections 7 & 9 of IBC is covered under Article 137 of the Limitation Act and therefore three years period to be taken into consideration from the date when default occurs for the purpose of limitation. It is reiterated that when we already held that there is no termination of contract from either of the parties, therefore, the contract still subsists and the claim is within limitation. NCLAT held that the default has arisen out of EPC Contract, which itself is a continuing contract. Even from the Demand Notice dated 02.07.2018 in particulars of operational debt at column-1, the Respondent had clearly stated that the debt fell due on 24.12.2010 and the last payment made to the Respondent was on 25.02.2011 through RTGS. It is also mentioned that the debt continues to fall even today as the EPC contract between the Appellant and Respondent never terminated by either parties.

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