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2019 (9) TMI 468 - AT - Insolvency and Bankruptcy
Maintainability of petition - initiation of Corporate Insolvency Resolution Process - default in repayment of debt - Insolvency and Bankruptcy Code, 2016 - HELD THAT:- There is no dispute with regard to the fact that the Corporate Debtor had taken credit facilities from UCO Bank on 19.01.2005, 22.02.2008, 31.03.2009, 06.11.2009 and 18th May, 2012. There is no dispute regarding the fact that Corporate Debtor had secured the credit facilities taken by equitable mortgage of immovable property and by executing other securities. The filing of proceedings before DRT in 2014 and invoking of Section 13(2) of SARFAESI in 2016 are also not disputed. Amount more than ₹ 1 Lakh is in default, is apparent from record. The proceeding in DRT is still pending.
It is clear that the question of limitation has to be looked into from the angle whether the debt is payable in law or in fact. Although the proceeding under IBC is an Application, question for consideration is whether the debt is payable in law. The yardstick is to see whether there is continuous cause of action for the debt claimed.
The limitation for enforcing payment of money secured by a mortgage or otherwise charged by the immovable property is twelve years at the time when money sued for becomes due. Thus for 12 years after becoming due, the debt would be payable in law. In the present matter, the sanction letters are between 19th January, 2005 to 18th May, 2012 and there were Master Restructuring Agreements executed in 2012. Apart from proceeding filed in DRT in May, 2014, which is pending, the loan was secured by equitable mortgage and as such, it cannot be said that the debt was barred by limitation, when Section 7 Application was filed on 07.08.2018.
There is no substance in the arguments raised with regard to limitation. As such, there is no substance in the Appeal.
Whether Corporate Debtor is MSME? - HELD THAT:- The question was raised only at the time of arguments and the Financial Creditor is raising dispute on the basis that the Application for status of MSME was sought only after the CIRP process started. We need not decide this issue at present as we are on the stage of admission of proceedings under Section 7. Whether or not the Corporate Debtor can take benefit of Section 29A of IBC would have to be considered at the appropriate stage.
Appeal dismissed.