![Winding Up Petition Does Not Save Limitation for Money Suit, Paying Admitted Bills Not Part Payment: Supreme Court in Mageba Bridge Products v. Trade Centre [2026 INSC 839]](/assets/images/article-corporate.svg)
Quick Answer: Filing a winding up petition does not stop limitation running for a separate suit for recovery of money, and the Company Court cannot extend limitation. The Supreme Court dismissed a supplier's money suit as time-barred, even though it found the plaintiff firm's registration under the Indian Partnership Act duly proved, because the suit was based on individual invoices, not a running account, and there was no acknowledgment of debt or part payment saving limitation.
In Mageba Bridge Products Private Limited v. M/s. Trade Centre (2026 INSC 839), the Supreme Court held that the respondent-firm's registration was proved by Exhibit-8 and the certified Form-VIII, so the suit was not hit by Section 69(2) of the Indian Partnership Act, 1932, but that the claim was barred by limitation (paras 4–6, 18). Applying Yeswant Deorao Deshmukh and Jignesh Shah, a Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran (author) held that a winding up proceeding does not affect limitation for a suit for recovery, that the reply relied on was not an acknowledgment of debt, and that payment of admitted invoices was not part payment of the suit debt (paras 13–17).
Status: High Court's judgment and decree in the First Appeal, which decreed the suit for Rs. 24,36,105 with 6% interest, reversed; suit dismissed as barred by limitation; Civil Appeal allowed (paras 2, 18–19).
Headnote: Winding Up Petition Does Not Save Limitation for Money Suit
Limitation Act – Section 14 – Indian Partnership Act, 1932 – Section 69(2) – Code of Civil Procedure, 1908 – Order XLI Rule 27(1) – Suit for recovery of money on invoices – Proof of registration of firm – Winding up petition – Exclusion of time – Acknowledgment of debt – Part payment – Running account.
Held: (i) Exhibit-8, a memorandum of the Registrar of Firms, West Bengal showing Registration No. L73931, proved registration of the respondent-firm at least on 14.05.2010, corroborated by the certified Form-VIII produced as an additional document; the Trial Court's dismissal under Section 69(2) could not be upheld (paras 4–6).
(ii) Following Yeswant Deorao Deshmukh and Jignesh Shah, the initiation of a winding up proceeding, which may or may not enable recovery, does not impact limitation for the separate remedy of a suit for recovery of money (paras 13–14).
(iii) Acceptance of two bills before the Company Court was not an admission giving up the plea of limitation, and the Company Court did not, and was not competent to, extend limitation (para 14).
(iv) For the bills dated 30.01.2006 the suit had to be filed before 29.01.2009; even the Company Petition filed on 10.02.2009 was outside limitation, making the Section 14 question academic for those bills (para 16).
(v) The appellant's reply (Annexure P-18) was not an acknowledgment of debt, and the payment made was for three admitted invoices, not a part payment of the claim (paras 15, 17).
(vi) The suit was founded on invoices and not on a running account; a deduction shown in the plaint schedule for payment of admitted bills does not make it a running account (paras 7, 17).
(paras 4–18)
Case Details: Mageba Bridge Products v. Trade Centre (2026 INSC 839)
Final Outcome: Civil Appeal allowed; decree of the First Appellate Court reversed on the relief of recovery; suit dismissed as time-barred, though registration of the plaintiff firm held proved.
Case: Mageba Bridge Products Private Limited v. M/s. Trade Centre
Neutral Citation: 2026 INSC 839
Case No.: Civil Appeal No. 10658 of 2026 (arising out of SLP (C) No. 24861 of 2025)
Court: Supreme Court of India (Civil Appellate Jurisdiction) – Reportable
Date of Decision: 12 August 2026
Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran (author)
Relevant Acts & Sections: Indian Partnership Act, 1932 – Section 69(2); Limitation Act – Section 14; Code of Civil Procedure, 1908 – Order XLI Rule 27(1)
Impugned Order: Judgment and decree of the High Court in the First Appeal, decreeing the suit for Rs. 24,36,105 with interest at 6% per annum from the date of suit (paras 2, 18)
Counsel: Sri Nikhil Nayyar, Senior Counsel, for the appellant; Sri Manish Goswami, Senior Counsel, for the respondent (para 3)
Source: Supreme Court of India
Key Holdings of the Supreme Court
- Registration of the plaintiff firm was proved by Exhibit-8 and the certified Form-VIII; the suit was properly instituted (paras 4–6, 18).
- A winding up petition and a suit for recovery are distinct remedies; pursuing the former does not save limitation for the latter (paras 13–14).
- The Company Court has no competence to extend limitation for a civil suit (para 14).
- A reply admitting only certain invoices, and payment of those invoices, is neither an acknowledgment of the suit debt nor a part payment (paras 15, 17).
- A suit on individual invoices is not converted into one on a running account by deductions shown in the plaint schedule (para 17).
Brief Facts of the Case
The respondent, a partnership firm, supplied goods to the appellant and sued for recovery on the strength of bills totalling Rs. 23,41,693, set out by date, invoice number, weight and amount in the plaint and schedule. The appellant resisted the claim, alleging that one of its employees had fraudulently created documents showing receipt of goods, except for two bills that were admitted and paid on receipt of notice (paras 7, 15).
Before the suit, the respondent had filed a Company Petition for winding up, affirmed on 07.02.2009 and filed on 10.02.2009. The Company Court did not entertain it as the claim was disputed, relegated the respondent to the civil remedy and directed the appellant to secure Rs. 12,38,000 covered by bills TC/152 and TC/153 dated 30.01.2006 before the Civil Court (paras 9, 14–16).
The suit was filed on 05.06.2010, pleading that the cause of action arose on 03.06.2008 (demand), 01.08.2008 (the appellant's reply, Annexure P-18) and 02.09.2008 (alleged part payment). The respondent also argued that the Company Court permitted it to file the suit within three months of disposal of the Company Petition (paras 8–9, 15–16).
The Trial Court dismissed the suit, holding that registration of the firm was not proved, so the suit was hit by Section 69(2) of the Indian Partnership Act. The First Appellate Court relied on Exhibit-8 and an additional document, and decreed the suit for Rs. 24,36,105 with 6% interest (paras 2, 4–5).
Issues Before the Supreme Court
- Whether the registration of the respondent-firm was validly proved (paras 4–6).
- Whether the time spent on the winding up petition could save limitation for the suit for recovery (paras 9–16).
- Whether the appellant's reply and payment amounted to an acknowledgment of debt or part payment, or whether the suit was on a running account (paras 8, 15, 17).
Court's Findings and Reasoning
Registration proved (paras 4–6): Exhibit-8, issued by the Registrar of Firms, West Bengal, showed Registration No. L73931 and registration at least on 14.05.2010. The certified Form-VIII admitted under Order XLI Rule 27(1) confirmed the same number and date. The Trial Court's finding that the plaintiff was not a registered firm could not be upheld.
Kalpraj Dharamshi distinguished (paras 11–12): The respondent relied on Kalpraj Dharamshi, where time bona fide spent in a writ petition before the High Court was considered when examining a delayed appeal to the NCLAT. The Court instead found Yeswant Deorao Deshmukh and Jignesh Shah to apply squarely on these facts (para 14).
Winding up and suit are distinct (paras 13–14): Yeswant Deorao Deshmukh held that time in insolvency proceedings could not be excluded for a delayed execution as the relief was different. Jignesh Shah held that a recovery suit does not affect a separate winding up remedy. The converse applies: a winding up proceeding does not affect limitation for a suit for recovery.
No admission and no extension by Company Court (para 14): The appellant disputed the claim before the Company Court. Its undertaking to secure two bills was not an admission giving up limitation, and the Company Court did not, and could not, extend limitation.
Suit out of time (paras 15–16): For the bills dated 30.01.2006, the suit had to be filed before 29.01.2009, and even the Company Petition filed on 10.02.2009 was beyond that date. The last unpaid bill of the others was dated 06.03.2007, and the suit filed on 05.06.2010 was after limitation expired.
No acknowledgment or part payment (paras 15, 17): Annexure P-18 admitted only three invoices, which were paid; one of them did not even figure in the suit schedule and had been paid on 12.12.2007. It did not acknowledge the debt sued for, and the payment was not a part payment.
No running account (para 17): The suit was filed on invoices, not on a running account, and a deduction in the plaint schedule for admitted bills did not make it one.
Final Outcome and Directions
- Order of the High Court in the First Appeal reversed to the extent of granting the relief of recovery (para 18).
- Finding that the suit was properly instituted by a registered partnership firm sustained (para 18).
- Suit dismissed as hit by limitation; appeal allowed; pending applications disposed of (paras 18–20).
Legal Principle Laid Down
A winding up petition and a suit for recovery of money are separate and independent remedies; time spent pursuing a winding up petition does not save limitation for the suit, and the Company Court cannot extend limitation. A reply admitting only some invoices, and payment of those invoices, is neither an acknowledgment of the disputed debt nor a part payment, and a suit on individual invoices is not a suit on a running account (paras 13–17).
Precedents Relied Upon
- Yeswant Deorao Deshmukh v. Walchand Ramchand Kothari, 1950 SCC 766 – Applied – time spent in insolvency proceedings not excludable for a different relief. Discussed at paras 13–14, 16.
- Jignesh Shah v. Union of India, (2019) 10 SCC 750 – Applied – a recovery suit and a winding up proceeding are separate and independent remedies. Discussed at paras 13–14, 16.
- Kalpraj Dharamshi v. Kotak Investments Advisor Limited, (2021) 10 SCC 401 – Relied on by the respondent; not applied – principles of Sections 5 and 14 of the Limitation Act for bona fide prosecution in a wrong forum. Discussed at paras 11–12.
Important Paragraphs of the Judgment
Verbatim extracts from the judgment. For the full text, refer to the judgment PDF below.
Para 4: "On a perusal of the impugned judgment, we are inclined to hold that there was sufficient evidence to find the registration of the respondent-firm."
Para 13: "The converse position applies squarely to this case that the initiation of a winding up proceeding, which may or may not enable recovery, will not impact the limitation for the separate remedy of suit for recovery of money."
Para 14: "There was also no extension of limitation by the Company Court, which in any event, the Court was not competent so to do."
Para 15: "However, Annexure P-18 indicates that there was no acknowledgment of debt and the payment made was not a part payment but the payment with respect to three invoices, admitted as remaining due, by the appellant/defendant."
Para 17: "The mere deduction shown with respect to the payment of the admitted bills, in the schedule to the plaint, will not make it a running account."
Para 18: "The claim for recovery is hit by limitation."
Practical Impact of the Ruling
- For creditors and suppliers: A winding up or insolvency petition does not keep a money claim alive; a recovery suit must be filed within limitation in its own right (paras 13–14, 16).
- For debtors: Admitting and paying some invoices, while disputing others, does not amount to acknowledging the disputed debt (paras 15, 17).
- For pleadings: A claim pleaded on individual invoices will be tested invoice by invoice, not as a running account (paras 7, 17).
- For partnership firms: The Registrar's memorandum showing the registration number, supported by certified Form-VIII, can prove registration for Section 69(2) (paras 4–5).
FAQs on Limitation for Money Suits After Winding Up Petition
1. What did the Supreme Court decide in Mageba Bridge Products v. Trade Centre?
It held the respondent-firm's registration proved but dismissed its suit for recovery as barred by limitation (para 18).
2. Does a winding up petition stop limitation for a recovery suit?
No. A winding up proceeding, which may or may not enable recovery, does not impact limitation for the separate remedy of a suit for recovery of money (paras 13–14).
3. Can the Company Court extend limitation for the civil suit?
No. There was no such extension, and the Company Court was not competent to grant one (para 14).
4. Was the debtor's reply an acknowledgment of debt?
No. It admitted and led to payment of only three invoices; it did not acknowledge the debt claimed, and the payment was not a part payment (paras 15, 17).
5. How was the firm's registration proved?
By Exhibit-8, a memorandum of the Registrar of Firms, West Bengal with Registration No. L73931, corroborated by a certified Form-VIII produced under Order XLI Rule 27(1) (paras 4–5).
Keywords: 2026 INSC 839, Mageba Bridge Products v. Trade Centre, limitation for money suit, winding up petition, Section 14 Limitation Act, acknowledgment of debt, part payment, running account, Section 69(2) Partnership Act, registration of firm, Order XLI Rule 27, Yeswant Deorao Deshmukh, Jignesh Shah, Kalpraj Dharamshi, Justice K. Vinod Chandran, Justice J.B. Pardiwala, Supreme Court judgment
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Download Judgment PDF – Mageba Bridge Products v. Trade Centre
Source: Supreme Court of India (official website).