9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 1875 - AT - Companies LawMaintainability of Application under section 7 of the Insolvency and Bankruptcy Code, 2016 - the Bank has neither acted in terms of circular and guidelines issued by the Reserve Bank of India nor in terms of the Reserve Bank of India Act - Held that - Such ground cannot be accepted to reject the application preferred by the Financial Creditor under Section 7 of the I&B Code , there being admitted default. Rejection of application also on the ground that amount due is barred by limitation - Held that - Such submission cannot be accepted in view of the fact that there is a continuous cause of action. Even if it is accepted that Limitation Act is applicable, in such case Article 137 of Part II of the Limitation Act will be applicable whereunder three years period from the date of right to apply accrued will be applicable - In the present case, the right to apply under Section 7 accrued to Punjab National Bank on 1st December, 2016, when I&B Code came into force. Before the same, it had no right to apply under Section 7 of the I&B Code . Therefore, even if the Limitation Act is made applicable, the application being not barred by limitation, interference is not called for. There is no merit in the appeal - appeal dismissed.
Issues:
1. Admissibility of the application under section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with circulars and guidelines issued by the Reserve Bank of India. 3. Barred by limitation under the Limitation Act. 4. Applicability of Article 137 of Part II of the Limitation Act. 5. Right to apply under Section 7 of the I&B Code. 6. Merits of the appeal. Analysis: 1. The judgment pertains to an appeal by the Director and Shareholder of a Corporate Debtor against the admission of an application under section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor. The appeal was dismissed by the Appellate Tribunal. 2. The Appellant argued that the Financial Creditor, a bank, did not adhere to circulars and guidelines issued by the Reserve Bank of India or the Reserve Bank of India Act. However, the Tribunal held that non-compliance with these guidelines cannot be a ground to reject the application under the I&B Code, especially when there is an admitted default. 3. Another contention raised was that the amount due was barred by limitation. The Tribunal rejected this argument, stating that there was a continuous cause of action. Even if the Limitation Act applied, Article 137 of Part II would be relevant, allowing a three-year period from the date the right to apply accrued. In this case, the right to apply arose when the I&B Code came into force, and hence, the application was not time-barred. 4. The Tribunal emphasized that the right to apply under Section 7 of the I&B Code accrued to the Financial Creditor on a specific date, and before that, there was no such right. Therefore, even if the Limitation Act was considered, the application was not barred by limitation. 5. Ultimately, the Tribunal found no merit in the appeal and dismissed it without imposing any costs. The decision was based on the lack of grounds for interference in the admission of the application under section 7 of the I&B Code.
|
