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TMI Blog2019 (5) TMI 1687X X X X Extracts X X X X X X X X Extracts X X X X ..... as passed: "The Appellant, Director of 'Veer Gurjar Aluminium Industries Pvt. Ltd.' (Corporate Debtor) has preferred this appeal against order dated 9th August, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench whereby the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short I&B Code) preferred by 'JM Financial Asset Reconstruction Company Ltd.' (assignee of debts of Corporation Bank) has been admitted, order of moratorium has been passed and Interim Resolution Professional has been appointed. 2. Learned counsel appearing on behalf of the Appellant submitted that a petition under Section 19 of 'The Recovery of Debts Due to Banks and Financial Institutions Act, 1993' is pending before Debt Recovery Tribunal, Aurangabad. Wherein question has been raised is whether the amount is payable to the assignee or not. 3. However, the initiation of Corporate Insolvency Resolution Process cannot be annulled merely on the ground of pendency of a petition under Section 19 of 'The Recovery of Debts Due to Banks and Financial Institutions Act, 1993'. In fact in terms of Section 14 of I&B Code a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to be agitated before the National Company Law Appellate Tribunal in the first place." 5. Learned counsel appearing on behalf of the Appellant argued on the question of limitation and submitted that the 'default' having committed on 8th July, 2011 whereas the petition under Section 7 of the I&B Code having filed in March, 2018, the application is not maintainable being barred by limitation. 6. On the other hand, the learned counsel appearing on behalf of the Respondent submitted that neither the application under Section 7 is barred by limitation nor the claim is barred by limitation as there being continuous cause of action. 7. To decide the issue, it is necessary to notice the relevant facts which are as follows: 8. Loan was sanctioned and disbursed by the 'Corporation Bank' in favour of the 'Corporate Debtor' on 22nd December, 2007. The account of the 'Corporate Debtor' was cleared. The Indian Overseas Bank, as a consortium also granted loan in favour of the 'Corporate Debtor'. On 15th November, 2011 Indian Overseas Bank issued notice to the 'Corporate Debtor' to repay the overdue amount. The Demand Notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority 'Form 1' which shows that the 'Corporate Debtor' has mortgaged number of properties at Aurangabad, as is apparent from Part V of Form 1 with the application under Section 7 of the I&B Code. It includes land at plot No. 250/2 admeasuring 1135 sq. mtrs. situated at Waluj, MIDC Industrial Area, Ranjangaon and outside limits of Aurangabad Municipal Corporation; the land at Gut No. 4 total admeasuring 35143.92 sq. ft. at village Ranjangaon, Gangapur District Aurangabad; land and building situated at Plot No. 24, admeasuring 468.75 sq. mtrs. Situated in Sector N-2/A, CIDCO, Aurangabad and other total 9 lands and buildings. 14. The 'Corporate Debtor' has also hypothecated on current assets of the borrower viz. stocks of raw material, stock in process, semi-finished and finished goods, bills receivables etc. both present and future lying or stored in or about or shall hereafter from time to time during the continuance of the security on or about of the 'corporate debtor's factory, premises and godowns situated at Aurangabad in the state of Maharashtra or elsewhere. This apart whole of the movable plant and machinery and other movable assets of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication filed under Section 7 or section 9 or section 10 of the I&B Code. 20. Part II of Third Division relates to Article 137, which is not a part of Second & Third Division and deal with 'Other applications' is applicable to the application under Section 7 or Section 9 or Section 10 of the I&B Code, which reads as follows : PART II - OTHER APPLICATIONS Description of application Period of limitation Time for which period being to run 137. Any other application for which no period of limitation is provided elsewhere in this division. Three years Where the right to apply accrues 21. The I&B Code has come into existence on 1st December, 2016 and thereafter the right to apply accrued to respondent - 'Financial Creditor' under Section 7 of the I&B code only on 1st December, 2016. The application having filed in the year 2018, we hold that the application under Section 7 is not barred by limitation. 22. Hon'ble Supreme Court in Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 143 SCL 625 observed and held : "27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be." 23. In Innoventive Indust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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