9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 1602 - Tri - Companies LawWhether insolvency process can be triggered in a matter where the default had occurred beyond a period of 3 years and the claim has become time barred on account of period of limitation prescribed by the Limitation Act, 1963 or by virtue of rule of prudence developed by the Courts. Held that - When the period of limitation was absent for filing of a writ petition, Hon ble the Supreme Court has taken the view that the period of limitation as prescribed in the Limitation Act would be the maximum. Constitution is supreme and fundamental law of/and all laws take guidance from the Constitution. Therefore, it is binding on all including this Tribunal. Then we ask learned Counsel for the Applicant whether an application under IBC would be maintainable to recover the amount which fell due 50 years ago. Mr. Mehta, learned Counsel for the Applicant lowered his eyes and was not able to propose any straight answer. We are thus of the considered view that this Tribunal cannot be a flowering pot for claims which have become dead and are wholly time barred. Petition fails and dismissed.
Issues Involved:
1. Applicability of the Limitation Act, 1963 to insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC). 2. Whether the claim is time-barred due to the period of limitation prescribed by the Limitation Act, 1963. 3. The effect of Section 238 of IBC and whether it overrides the Limitation Act. 4. Acknowledgement of debt and its impact on the period of limitation. Issue-wise Detailed Analysis: 1. Applicability of the Limitation Act, 1963 to Insolvency Proceedings under IBC: The Tribunal considered whether the Limitation Act, 1963 applies to insolvency proceedings under the IBC. The Tribunal referred to the Principal Bench's decision in M/s. Deem Roll-Tech Limited vs. M/S. R.L. Steel & Energy Limited, which held that the period of limitation is applicable to claims made by operational creditors. The Tribunal emphasized that the IBC does not explicitly exclude the application of the Limitation Act, and Section 433 of the Companies Act, 2013, which applies the Limitation Act to proceedings before the Tribunal, supports this view. 2. Whether the Claim is Time-Barred: The Tribunal noted that the default occurred in September 2013, and the petition was filed on May 12, 2017, which is beyond the three-year limitation period. The Tribunal cited the Supreme Court's judgments in L.S. Synthetics Ltd. v. Fairgrowth Financial Services Ltd. & Anr. and M.P. Steel Corporation v. Commissioner of Central Excise, which discussed the applicability of the Limitation Act to tribunals and special courts. The Tribunal concluded that the claim is time-barred as it was made after the expiry of the three-year period prescribed by the Limitation Act. 3. Effect of Section 238 of IBC: The Tribunal addressed the argument that Section 238 of IBC, which contains a non-obstante clause, overrides the Limitation Act. The Tribunal held that Section 238 only applies when there is a conflict between the IBC and other laws. In this case, no conflict was identified that would trigger the application of Section 238. Therefore, the Limitation Act's provisions remain applicable to insolvency proceedings under the IBC. 4. Acknowledgement of Debt: The Tribunal examined whether there was any acknowledgment of the debt within the three-year limitation period that could extend the period. The Tribunal found no evidence of any acknowledgment that would constitute a basis for extending the limitation period. The Tribunal referred to the reply to the notice dated February 8, 2017, but concluded that it did not amount to an acknowledgment of liability within the prescribed period. Conclusion: The Tribunal dismissed the petition, stating that it cannot entertain claims that are time-barred. The Tribunal emphasized the importance of adhering to the period of limitation and the principle that the law does not assist those who sleep over their rights. The Tribunal also highlighted that public policy requires vigilance in asserting legal rights within the prescribed time limits.
|
