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2022 (7) TMI 985 - AT - Insolvency and BankruptcyValidity of order of NCLT admitting the application for CIRP - suppression of facts and concealment by Respondent No.1 in his Section 7 Application - HELD THAT:- When there was specific order of the Division bench restraining Respondent No.1 to file any Application in any other forum without disclosing the order dated 09.08.2017, it was incumbent upon Respondent No.1 to file the copy of the said order before the Adjudicating Authority. Respondent No.1 has concealed the said order from the Adjudicating Authority, since the order had made adverse observation against Respondent No.1, which would have resulted in rejection of Section 7 Application. Further, the order dated 14.07.2014, where the assignments were observed by the High Court as a dubious, were also not brought before the Adjudicating Authority. We are thus satisfied that Respondent No.1 has concealed the relevant orders passed by the Company Judge in CP No.355 of 1997, which Respondent No.1 was obliged to place before the Adjudicating Authority, especially the order dated 09.08.2017 of the Division Bench, which was passed on the Application filed by Respondent No.1 himself, that is, CA No.107 of 2016. We are, thus, satisfied that Respondent No.1 is guilty of suppression of material facts and relevant orders before the Adjudicating Authority and the submission of learned Counsel for the Appellant is correct that the suppression was made only with the motive to obtain an admission order to somehow grab the assets of the Corporate Debtor. Locus of the appellant - HELD THAT:- The Application of Appellant as well as Respondent No.1 was considered and rejected by Company Judge by order dated 14.07.2014. Thus, when the Appellant was before the Company Judge claiming his right as unsecured creditor, he has every right to file an I.A. No.1069 of 2021. When Adjudicating Authority heard the Appellant and considered his claim and rejected the same, we see no reason, as to why the Appellant cannot be held to be aggrieved by the order impugned, so as to enable him to file Appeal under Section 61 of the Code. Default in payment of dues - period of limitation - company is under liquidation - HELD THAT:- Initiation of proceedings for recovery indicate that default has occurred prior to initiation default by Company. The Application under Section 7 by Respondent No.1 does not indicate as to on what basis it can claim that it has right to file an Application under Section 7 on 18.02.2020. As observed above, the date of default of debt fell due mentioned in the Application as 19.12.2019, is wholly fictious and incorrect, the said date has no relevance with regard to debt falling due on 19.12.2019. 19.12.2019 is the date when Company Petition was dismissed in default, which order also came to an end on 20.02.2020, when Company Petition was revived. The Application under Section 7 filed by Respondent No.1 was highly barred by time and in the entire Application there is no explanation as to how the limitation for filing the Application is there till 18.02.2020. The limitation for filing an Application by Respondent No.1 has long expired and the Application ought to have been rejected as barred by time on which aspect, Adjudicating Authority failed to advert - It is well settled by catena of judgments of Hon’ble Supreme Court that limitation for filing an Application under Section 7 of the IBC is three years, which is governed by the Article 137 of the Limitation Act, 1963. Admittedly, the Company was in liquidation with effect from 26.11.1997 and all assets of the Corporate Debtor were custodial legis and in the control and possession of the Official Liquidator. How default can be committed by Corporate Debtor after liquidation process has commenced from 26.11.1997 has also not been explained in Section 7 Application. Although, the learned Senior Counsel for the Appellant also attacked on un-registered assignment deeds executed in the year 2007 and 2008, which is the basis of the claim of Respondent No.1, but without entering into the aforesaid issue, on the facts which have been claimed by Respondent No.1 itself in Section 7 Application, it is clear that claim of Respondent No.1 in respect of debt was highly time barred. There shall be default of debt, only when debt is due - Adjudicating Authority has committed error in admitting Section 7 Application without adverting to the question as to whether the debt as claimed was due when Section 7 Application was filed. The question of limitation of an Application has to be gone into by the Court, even though no defence has been taken by the Respondent. In the present case, the Corporate Debtor being into liquidation, it appears that no reply has been filed in Section 7 Application. The position of law is clear by the aforesaid pronouncement of the Hon’ble Supreme Court. Although, pendency of winding-up petition before the High Court may not preclude filing of Section 7 Application, but in the present case, when there are various orders passed by Company Judge, in Company Petition No.355 of 1997, which has relevance and consequence on Section 7 Application, the orders passed in Company Petition ought to have been adverted by the Adjudicating Authority before admitting Section 7 Application - thus, Adjudicating Authority committed error in admitting Section 7 Application, which did not deserve admission in the facts of the present case. Appeal allowed - Application which was admitted by the NCLT dismissed.
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