Court Rules in Favor of Jones Lang Lasalle, Excludes Time Spent in NCLT Proceedings Due to Jurisdictional Bar
In a significant judgment by the Calcutta High Court, Justice Aniruddha Roy ruled in favor of Jones Lang Lasalle Property Consultants (India) Private Limited, allowing the exclusion of time spent in a previous proceeding under Section 9 of the Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT). The civil suit, filed subsequently, was deemed to qualify for the benefit under Section 14(1) of the Limitation Act, 1963, on the grounds that the matter in issue was identical in both proceedings and the prior proceeding was pursued with due diligence and in good faith.
The case involved a dispute over unpaid fees for services rendered by Jones Lang Lasalle to M. A. Leasing and Construction Pvt. Ltd., with the defendants having responded to a demand notice issued under Section 8 of the IBC. Following the dismissal of the IBC application by NCLT due to pre-existing disputes—a jurisdictional bar—the plaintiff sought to pursue remedies through the civil court.
The court emphasized the liberal interpretation of Section 14(1), which permits the exclusion of time spent in bona fide proceedings before a forum that is unable to entertain the matter due to jurisdictional defects or other causes of a similar nature. Justice Roy highlighted that the dismissal of the NCLT application was not on merits but due to the jurisdictional bar caused by pre-existing disputes, thereby qualifying as a "cause of like nature" under Section 14(1).
The judgment also clarified that the subsequent civil suit and the prior NCLT proceedings were related to the same matter in issue—the occurrence of default by the defendants. Justice Roy underlined the importance of ensuring that litigants are not penalized for pursuing remedies in forums lacking jurisdiction, advocating for a liberal interpretation to advance the cause of justice.
The court's decision to admit the civil suit comes as a relief to the plaintiff, preventing irreparable loss due to technicalities and affirming the principle that procedural hurdles should not obstruct the pursuit of justice.
Bottom line:-
Section 14(1) of the Limitation Act, 1963 allows exclusion of time spent in pursuing a prior civil proceeding before a forum that lacked jurisdiction or was unable to entertain the matter due to other causes of like nature, provided the matter in issue is the same in both proceedings and the previous proceeding was prosecuted in good faith and with due diligence.
Statutory provision(s): Section 14(1) of the Limitation Act, 1963; Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016
