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2019 (2) TMI 1686 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process (CIRP) - Financial creditor - default in repayment of loan - Section 7 of the Insolvency and Bankruptcy Code - Time limitation - HELD THAT:- Corporate Debtor’s foremost contention, that the documents to prove that the Financial Creditor is acting in its capacity as a trustee of the Phoenix Trust have not been placed on record, is rejected as the Assignment Agreement itself is evident of this fact and the same has not been challenged by the Corporate Debtor. Hence, no further proof is required to be submitted in this regard. Also, as per section 5(7) of IBC, Financial Creditor means any person to whom a financial debt is owed and includes a person to whom such a debt is legally assigned or transferred. The Assignment Agreement dated 29.06.2015 legally assigns the impugned debt to Phoenix ARC Pvt. Ltd. as trustee of Phoenix Trust. Therefore, Phoenix ARC is a Financial Creditor in the meaning of section 5(7) and hence this contention of the Corporate Debtor is unsustainable. The Petition is not barred by limitation as the given petition is to enforce the payment of money secured by a mortgage of immovable property. Hence, as per Article 62 of the Limitation Act, 1963, the limitation period is twelve years from the date when the money sued for becomes due. Even if the limitation is to be taken three years from the date when the cause of action arose, then also the Corporate Debtor’s Balance Sheet as on 31.03.2017 acknowledge the amount payable to the Financial Creditor. Hence, in view of Section 18 of the Limitation act, 1963, the limitation stands extended. Hon’ble Supreme Court in the matter of Innoventive Industries Limited V. ICICI Bank & Anr. [2017 (9) TMI 58 - SUPREME COURT], wherein inter alia it was held that the provisions of Section 7 become applicable as soon as a financial debt is established and there is an existence of default. The Hon’ble court has expressed that the moment the Adjudicating Authority is satisfied that a default in repayment of debt had occurred, the process of insolvency is to be triggered, unless the application is incomplete. The nature of Debt is a “Financial Debt” as defined under section 5 (8) of the Code. It has also been established that admittedly there is a “Default” as defined under section 3 (12) of the Code on the part of the Debtor - Petition admitted.
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