Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2020 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 12 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of default and debt - time limitation - HELD THAT:- The application of Article 137 of the Limitation Act, 1963 for moving application under Sections 7 or 9 of the I&B Code, fell for consideration before the Hon’ble Supreme Court and this Appellate Tribunal in number of cases. In B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT], the Hon’ble Supreme Court held that the Limitation Act, 1963 has in fact been applied from the inception of the Code. Similar issue fell for consideration before the Hon’ble Supreme Court in GAURAV HARGOVINDBHAI DAVE VERSUS ASSET RECONSTRUCTION COMPANY (INDIA) LTD. AND ANR. [2019 (9) TMI 1019 - SUPREME COURT]. In the said case, the Hon’ble Supreme Court has noticed that the Respondent was declared NPA on 21st July, 2011. The Bank had filed two OAs before the Debts Recovery Tribunal in 2012 to recover the total debt. Taking into consideration the facts, the Supreme Court held that the default having taken place and as the account was declared NPA on 21st July, 2011, the application under Section 7 was barred by limitation. As, the ‘Corporate Debtor’ having committed default prior to 9th September, 2014, i.e. much before the assignment of debt to Phoenix ARC Private Limited, we hold that the Application under Section 7 of the I&B Code was barred prior to 9th September, 2017 - The Application under Section 7 of the I&B Code was filed on 29th September, 2017, i.e., much after three years of the cut-off period of default, which was prior to 9th September, 2017. Section 22 of the Limitation Act, 1963 relates to ‘breaches and torts’, for the purpose of counting the fresh period of limitation. The said Section 22 of the Limitation Act, 1963 may be applicable to find out whether the claim is barred by limitation or not, but cannot be made applicable for counting the period of limitation for Application under Section 7 of the I&B Code, which is to be counted from the date of default/ NPA as held by the Hon’ble Supreme Court in terms of Section 7(5) of the I&B Code - The ‘Corporate Debtor’ is released from all the rigors of ‘Corporate Insolvency Resolution Process’. The ‘Interim Resolution Professional’ will handover the assets and records of the ‘Corporate Debtor’ to the Promoters/ Board of Directors immediately. The case is remitted to the Adjudicating Authority (National Company Law Tribunal) for determination of fee and Corporate Insolvency Resolution cost payable to ‘Interim Resolution Professional’/ ‘Resolution Professional’, which will be borne by Phoenix ARC Private Limited. Appeal allowed.
|