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2023 (7) TMI 830 - HC - Insolvency and BankruptcySeeking dismissal of the application filed under Section 7 of the IBC - barred by limitation or not - review of the order directing liquidation as well as the order initiating Corporate Insolvency Resolution Process - It was contended that the application filed by respondent No. 2 under Section 7 of IBC was clearly barred by limitation and therefore, all proceedings and orders passed on the basis of such application were non est in the eye of law. HELD THAT:- NCLT had passed the initial order dated 20.09.2019 after hearing both the financial creditor as well as the corporate debtor. Petitioner had filed reply to the application filed under Section 7 of IBC but did not raise any issue of limitation. What was urged before the NCLT was that it was because of the methodology adopted by the financial creditor that the corporate debtor ran into liquidity crunch which resulted in default in payment of outstanding dues. Be that as it may, if the petitioner was aggrieved by the order dated 20.09.2019, he had his remedy of filing appeal under Section 61 of the IBC. However, under sub-section (2) of Section 61, such appeal is required to be filed within thirty (30) days before NCLAT. As per the proviso, NCLAT has the discretion to allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days. Thus, overall there is limitation of 45 days in filing appeal under Section 61. Petitioner did not file any such appeal. Long thereafter he filed an interlocutory application under Section 60(5)(c) of IBC for rejecting the application filed under Section 7 of IBC as being barred by limitation which we have seen above has been dismissed by NCLT vide the impugned order dated 30.03.2021. NCLT shall have jurisdiction to entertain or dispose of any application or proceeding by or against the corporate debtor or corporate person; any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and any question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under IBC. It is under this provision that the related interlocutory application was filed by the petitioner. According to us, it has been rightly dismissed by the NCLT. In Glaxo Smith Kline Consumer Health Care Limited [2020 (5) TMI 149 - SUPREME COURT], Supreme Court has held that ordinarily High Court should not entertain a petition under Article 226of the Constitution of India after exhaustion of the limitation period provided by the statute for availing the remedy thereunder. Extension of limitation in proceedings under IBC - HELD THAT:- Adverting to Section 18 of the Limitation Act, 1963, Supreme Court in Chandra Prakash Jain [2021 (10) TMI 144 - SUPREME COURT] held that the said provision is applicable to applications filed under Section 7 of IBC. In case the application under Section 7 of IBC is filed beyond the period of limitation of three years from the date of default and the financial creditor furnishes the required information relating to acknowledgement of debt in writing by the corporate debtor before the adjudicating authority, with such acknowledgement having taken place within the initial period of three years from the date of default, a fresh period of limitation commences and the application can be entertained if filed within this extended period. In the instant case, the date of declaration of the loan account as NPA. It is 31.05.2011. Demand notice was issued by respondent No. 2 to the corporate debtor under Section 13(2) of the SARFAESI Act on 22.06.2011, followed by possession notice dated 15.09.2021. While proceeding under the SARFAESI Act was going on, a proposal for rescheduling of the loan account was mooted by the parties on 19.03.2012. Corporate debtor had also executed balance confirmations on 04.07.2013. Thereafter, corporate debtor had submitted proposal by way of e-mail communications dated 22.12.2015 and 23.12.2015 showing its readiness and willingness to settle outstanding dues at Rs. 16.00 crores. A meeting was held thereafter between the corporate debtor and the financial creditor on 08.01.2016 - Following further communications between the parties, respondent No. 2 agreed for settlement of its dues under OTS vide letter dated 22.04.2016. It was thereafter that application under Section 7 of IBC was filed before NCLT in the year 2018, to be precise on 29.10.2018, which ultimately led to the order dated 20.09.2019. Therefore, it cannot be said that the application under Section 7 of IBC is barred by limitation. The present writ petition is thoroughly misconceived and is liable to be dismissed - Petition dismissed.
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