SA Limited ("Respondent") required commercial supply of natural gas, the Respondent and SG Limited ("Appellant") entered into a gas sales agreement ("GSA"), where under the Appellant had the obligation to supply natural

The present case is similar to the case of Sabarmati Gas Limited vs. Shah Alloys Limited Case no.: Civil Appeal No. 1669 of 2020 Decision Date: 4th January, 2023 . Issue 1: Exclusion of Limitation Period under SICA The Hon'ble Supreme Court interpreted the provision related to limitation of time that section 238A of Insolvency and Bankruptcy Code, 2016 renders the provision of Limitation Act applicable to the computation of the period of limitation in regard to proceedings before the NCLT. Decision in the case of B.K. Educational Services Private Limited was referred by the Hon'ble Supreme Court, that the period of limitation is three years from the right to apply accrues but the delay is condonable on sufficient grounds as provided under Section 5 of the Limitation Act. Sufficient cause is the cause for which a party could not be blamed. As such, in the absence of provisions for exclusion of the period of suspension of legal proceedings, the same can be excluded and is sufficient cause for condoning the delay under Section 5 of the Limitation Act. Hon'ble Court held that question of condonation of delay is not considered it will result in injustice as the party was statutorily prevented from initiating action against the industrial company concerned. Moreover, for an application filed under section 7 or 9 of Insolvency and Bankruptcy Code, 2016, the date of coming into force of Insolvency and Bankruptcy Code, 2016 i.e., 01.12.2016 would not form the trigger point of limitation and the period of limitation for an application for initiating of CIRP under Section 9, Insolvency and Bankruptcy Code, 2016 would be three years from the date when the right to apply accrues as provided by Article 137 of the Limitation Act. Therefore, the period during which the operational creditor's right to proceed against or sue the corporate debtor was suspended by virtue of Section 22(1) of SICA can be excluded in computing the period of limitation for an application under Section 9 of IBC, as provided under Section 22(5) of SICA. This exclusion is crucial for determining if the application is time-barred. Issue 2: Pre-existing Dispute Furthermore, the Hon'ble Supreme Court concluded that there was a pre-existing dispute between the parties. The existence of a 'pre-existing dispute' prior to the issuance of the demand notice under Section 8 of IBC is a valid ground for dismissing an application under Section 9 of IBC at the threshold. The IBC aims to resolve insolvency, not to be a recovery mechanism for disputed debts. If a dispute regarding the operational debt exists and is brought to the notice of the corporate debtor before the demand notice, the NCLT is justified in dismissing the application.