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2022 (3) TMI 364 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - whether the Application which was filed by the Financial Creditor against the Corporate Debtor was within limitation or beyond limitation? - HELD THAT:- It is the settled law that Application under Section 7 of the IBC is covered by Article 137 of the Limitation Act, 1963 according to which the Application under Section 7 is to be filed within three years from the date when right to sue occurs. The first submission of Learned Counsel for the Respondent No. 2 is based on One Time Settlement offer given by Principal Borrower on 11.02.2014 and 04.03.2016. Before we proceed to consider the above submission, it is relevant to find out what was the case of the Respondent No. 2 before the Adjudicating Authority on the question of limitation, the Application under Section 7 filed by the Financial Creditor against the Corporate Debtor is filed as Annexure A-18 of the Appeal Paper Book. Under Part-IV of the Application in Item No. 2 the date of first occurrence of default is mentioned 13.03.1989 and under Part-V Particulars of an Order of a Court, Tribunal or Arbitral Panel Adjudicating on the default, if any (attach a copy of the order), reference to Order passed by Tribunal as Annexure 17 of the Appeal Paper Book has been made. It is clear that in the pleadings and submissions which was raised by Financial Creditor-Respondent No. 2 before the Adjudicating Authority regarding the question of limitation was claiming limitation of 12 years. The Adjudicating Authority did not return any finding or recorded any reason on the objection regarding limitation and without answering the objection and recording any findings, has admitted the Application. When objection was raised before the Adjudicating Authority that Application was barred by time it was incumbent on the Adjudicating Authority to consider and answer the question of limitation - it is mandate of law to dismiss the Application which is barred by limitation. The Adjudicating Authority committed error in not adverting to the objection of Limitation and proceeded to admit the Application. Whether the Respondent No. 2 can claim One Time Settlement Offer which was given by Principal Borrower to the IDBI Bank for the purpose of extension of limitation period of the Application filed against the Corporate Guarantor i.e. Corporate Debtor? - HELD THAT:- When the Application under Section 7 against the Principal Borrower has already been dismissed by this Tribunal and confirmed by the Hon’ble Supreme Court, we need not entertain any submissions of the Learned Counsel for Respondent No. 2 that Principal Borrower was entitled for extension of limitation under Section 18 by virtue of One Time Settlement Offer dated 11.02.2014 and 04.03.2016 - there is no need to consider the above submissions of Learned Counsel for Respondent No. 2 quo the Application of Principal Borrower within time by virtue of extension of limitation on the basis of aforesaid the proposal of One Time Settlement. The fresh cause of action which arose to the Financial Creditor on the basis of Decree dated 06.05.2011 and the Recovery Certificates dated 22nd December, 2011 of Debt Recovery Tribunal came to an end in the year 2014 itself and the Application under Section 7 filed on 10th July, 2018 was beyond the period of Limitation. Application under Section 7 filed by the Financial Creditor against the Corporate Debtor was beyond the period of limitation and could not have been admitted by the Adjudicating Authority - Appeal allowed.
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