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2017 (11) TMI 1679 - AT - Insolvency and BankruptcyLimitation Act 1963 applicability for triggering Corporate Insolvency Process under I&B Code - Held that - As decided in Speculum Plast (P.) Ltd. v. PTC Techno (P.) Ltd. 2017 (12) TMI 454 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI in view of the settled principle while we hold that the Limitation Act 1963 is not applicable for initiation of Corporate Insolvency Resolution Process we further hold that the Doctrine of Limitation and Prescription is necessary to be looked into for determining the question whether the application under Section 7 or Section 9 can be entertained after long delay amounting to laches and thereby the person forfeited his claim. The stale claim of dues without explaining delay normally should not be entertained for triggering Corporate Insolvency Resolution Process under Sections 7 and 9 of the I&B Code . However the aforesaid principle for triggering an application under Section 10 of the I&B Code cannot be made applicable as the Corporate Applicant does not claim money but prays for initiation of Corporate Insolvency Resolution Process against itself having defaulted to pay the dues of creditors. We accordingly set aside the impugned order dated 25th May 2017 and remit C.P. back to the Adjudicating Authority Principal Bench New Delhi to consider the matter in accordance with law.
Issues:
Delay in preferring the appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016; Application under Section 9 barred by limitation; Applicability of Limitation Act, 1963 for triggering 'Corporate Insolvency Process'; Interpretation of Article 137 of the Limitation Act; Setting aside the impugned order and remitting the matter back to the Adjudicating Authority. Delay in Preferring the Appeal: The Registry questioned the delay in preferring the appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016. The appellant argued that there was no delay as the order copy was made available on 28th June, 2017, and the appeal was filed on 28th July, 2017. The Appellate Tribunal held that there was no delay in preferring the appeal, despite the Registry's initial rejection. Application Barred by Limitation: The appeal was filed against an order rejecting the application under Section 9 by the Adjudicating Authority on the grounds of being barred by limitation. The Appellate Tribunal examined the issue of delay and laches in filing applications under Section 7 or Section 9 of the Insolvency and Bankruptcy Code. Referring to the Speculum Plast case, the Tribunal emphasized the importance of the Doctrine of Limitation and Prescription in determining the acceptance of applications filed after a long delay. Applicability of Limitation Act for 'Corporate Insolvency Process': The Tribunal discussed the applicability of the Limitation Act, 1963 for triggering the 'Corporate Insolvency Resolution Process' under the Insolvency and Bankruptcy Code. Citing the Speculum Plast case, the Tribunal clarified that while the Limitation Act is not applicable for initiating the process, the Doctrine of Limitation and Prescription should be considered to evaluate delays in filing applications under Section 7 or Section 9. Interpretation of Article 137 of the Limitation Act: The Appellate Tribunal analyzed Article 137 of the Limitation Act, emphasizing that applications under Section 7, 9, or 10 cannot be rejected based on the ground of being barred by limitation for being filed beyond three years. The right to apply under these sections accrues from the enforcement of the Insolvency and Bankruptcy Code on 1st December 2016, thus applications filed after this date cannot be rejected solely on limitation grounds. Setting Aside the Impugned Order: As the case of the appellant fell within the purview of the Speculum Plast case, the Appellate Tribunal set aside the impugned order dated 25th May 2017. The matter was remitted back to the Adjudicating Authority, Principal Bench, New Delhi for reconsideration in accordance with the law. The appeal was allowed with no order as to costs. This detailed analysis of the judgment addresses the issues of delay in appeal, limitation of applications, the applicability of the Limitation Act, and the consequential setting aside of the impugned order, providing a comprehensive overview of the legal considerations and decisions made by the Appellate Tribunal.
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