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2019 (12) TMI 1273 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - matter is pending before the Debt Recovery Appellate Tribunal against the order passed under the SARFAESI Act, 2002 - ‘Financial Creditor’ from initiating any coercive steps subject to deposit of money by the ‘Corporate Debtor’ - time limitation - HELD THAT:- In B.K. Educational Services Private Limited V. Parag Gupta and Associates [2018 (10) TMI 777 - SUPREME COURT], the Hon’ble Supreme Court held that the Limitation Act, 1963 is applicable to applications filed under Sections 7 and 9 of the ‘I&B Code’ from the inception of the Code, and as such Article 137 of the Limitation Act gets attracted. The Limitation Act, 1963 was also made applicable by insertion of Section 238A of the ‘I&B Code’. In the present case, in fact the default took place much earlier. It is admitted that the debt of the ‘Corporate Debtor’ was declared NPA on 1st December, 2008 as has been noticed by the Adjudicating Authority - ‘Asset Reconstruction Company (India) Ltd.’- (Financial Creditor) cannot derive any benefit of the action taken under ‘SARFAESI Act, 2002’ which is guided by separate provisions of limitation - Admittedly, the ‘Financial Creditor’ took action under the ‘SARFAESI Act, 2002’ in the year 2013. Therefore, the second time it become NPA in the year 2013 when action under Section 13(2) was taken. In the present case, the account was declared NPA since 1st December, 2008 and therefore, the suit was filed. Thereafter, any document or acknowledgment, even after the completion of the period of limitation i.e. December, 2011 cannot be relied upon. Further, in absence of any record of acknowledgment, the Appellant cannot derive any advantage of Section 18 of the Limitation Act. For the said reason, the application under Section 7 is barred by limitation, the accounts of the ‘Corporate Debtor’ having declared NPA on 1st December, 2008. The Adjudicating Authority having failed to appreciate the aforesaid fact, the impugned order dated 1st May, 2019 rejecting the objections of the ‘Corporate Debtor’ and the impugned order dated 31st May, 2019 passed by the Adjudicating Authority admitting the application under Section 7 are set aside - appeal allowed.
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