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2021 (3) TMI 686 - 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 - HELD THAT:- The Application under Section 7 of the I&B Code for initiation CIRP against the debtor is maintainable only when a default has occurred. Hon’ble Supreme Court in the Case of B.K. Education Services Pvt. Ltd. Vs. Parag Gupta & Associates [2018 (10) TMI 777 - SUPREME COURT] held that “ the right to sue accrues” when a default occurs. If the default has occurred over three years prior to date of filing of the application under Section 7 of the I&B Code; the application would be barred under Article 137 of the Limitation Act. The date of right to sue can be extended only when the debt is acknowledged by the Corporate Debtor within limitation of three years - Admittedly, in this case, the Appellant has committed default and the loan account declared as NPA before 2001 and thereafter - Respondent No. 1 has not placed on record any document of acknowledgement of debt within limitation of three years. The Corporate Debtor committed default and the loan account declared as NPA before 2001 and thereafter, there is no acknowledgement of debt within limitation of three years and it is clear that the Judgment/decree passed by the DRT-II on 29.04.2019 cannot shift forward the date of default for the purpose of computing the period for filing an Application under Section 7 of the I&B Code. Thus, the Application under Section 7 of the I&B Code filed by the Respondent No. 1 on 23.01.2019 against the M/s L.S.P. Agro Ltd. (Corporate Debtor) is barred by limitation and was not maintainable. The matter is remitted back to the Ld. Adjudicating Authority to decide fees and costs of ‘CIRP’ payable to IRP/RP, which shall be borne by the Respondent No. 2 (Corporate Debtor).
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