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2019 (8) TMI 1656 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation for filing application - bar on financial creditor from instituting the present petition. Time Limitation - HELD THAT:- The filing of the proceedings before the Debts Recovery Tribunal by the financial creditor under the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993, continues the period of limitation, or in other words, stops the running of the period of limitation from March 25, 2014 when the OA was filed by the financial creditor before the Debts Recovery Tribunal, Kolkata. Pendency of a petition under the provisions of the RDDBFI Act, 1993, being not a bar for initiating the proceedings under the I and B Code, filing of this application is within the period of limitation. The right to apply under the provisions of the Code started from the date of commencement of the Code and not on the date of default as attempted to be established on the side of the corporate debtor. So the contention on the side of the corporate debtor that second submission of learned senior counsel for the financial creditor is fallacious and unacceptable, and is found devoid of any merit. Valid acknowledgment of debt by the corporate debtor in its financial statement for the year ending March 31, 2017 - HELD THAT:- As per the civil suit pending for consideration, the corporate debtor challenged the procedure followed by the financial creditor in declaring the account as NPA. This case not on the basis of declaration of account as NPA but on the basis of occurrence of default. It has come out in evidence that no amount was repaid. Admittedly, the loan was availed by the corporate debtor. That being so the recital in the note that declaration of account as NPA is under challenge before the High Court and hence there is no direct admission in writing in the balance-sheet, is found devoid of any merit. In view of the above said we are inclined to hold that the balance-sheet above refereed is an acknowledgment of debt found due to the financial creditor from the corporate debtor and therefore the said ground taken by the corporate debtor is found unsustainable under section 18 of the Limitation Act, 1963. The next submission on the side of the financial creditor is that even if it is found that filing of this application is barred by article 137, or under section 21 of the Limitation Act, 1963, the period of limitation for filing this application being 30 years as per article 63(a) filing of this application is within the period of limitation - HELD THAT:- Here in this case the financial creditor is not a mortgagor, but is a mortgagee, and therefore article 61(b) is not applicable, but article 63(a) appears to be applicable. By applying the very same principle applied by the hon'ble NCLAT in the said case, we can rightly hold that the applicant being a mortgagee its claim is not barred by limitation as the period of limitation is 30 years. Thus, it can be concluded that the filing of this application is within the period of limitation and the claim of the financial creditor is not barred by limitation. This point is answered in favour of the financial creditor. Whether the interim order in C. S. No. 191 of 2014, passed by the hon'ble Calcutta High Court, in any manner whatsoever prevents or bars the financial creditor from instituting the present petition? - HELD THAT:- On going through the relief sought for in the suit, and since these newly instituted proceedings in no way related to any steps to be initiated in a Debts Recovery Tribunal proceedings, we are of the opinion that the order in no way would affect the right of the financial creditor from initiating the proceedings under the provisions of the Code. Accordingly, we do not find any merit in the submission on the side of the corporate debtor. This point is answered accordingly. Thus, filing of the application on August 10, 2018 is within the period of limitation ; that the claim of the financial creditor is not barred by any of the provisions of the Limitation Act, 1963 and that initiating the proceedings under section 7 by the financial creditor as against the corporate debtor is not contrary to the order dated July 12, 2014 passed by the hon'ble High Court, at Calcutta. Therefore, this application filed under section 7 of the I and B Code is found perfectly maintainable. The corporate debtor has miserably failed to substantiate that the dispute it raised in the reply is fit for not to initiate CIRP and also failed to substantiate any reason as to why the application filed under section 7 of the I and B Code, shall not be initiated against the corporate debtor. The application filed is otherwise complete. Though no record with the information utility seen produced in the instant case a copy of report from CIRF High Mark Credit Information Services P. Ltd., as annexure 2B, produced on the side of the financial creditor proves that the corporate debtor is a defaulter - Being satisfied that there is default, that the application is complete as per section 7(5)(a) of the I and B Code, the application warrants admission as prayed for on the side of financial creditor. Application admitted - moratorium declared.
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