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2019 (5) TMI 1680 - AT - Insolvency and BankruptcyMaintainability of application - Section 7 of I B Code - initiation of CIRP - debt and default by Corporate Debtor - HELD THAT - The question whether the claim is barred by limitation to see that there is no debt payable in law we hold that the claim of ARCIL is not barred by limitation as the assignment deed was made in favour of ARCIL on 28.3.2014 which was declared invalid by DRT Ahmedabad by an order dated 10.6.2016 and thereafter having revived pursuant to Hon ble Gujarat High Court order. The Corporate Debtor offered three settlement proposals for payment of debt on 24.2.2015 29.4.2015 and 26.6.2015 to ARCIL. Appeal dismissed.
Issues:
1. Validity of assignment deed in favor of Financial Creditor 2. Barred claim by limitation under the Insolvency & Bankruptcy Code 3. Requirement of Board Resolution for assignment validity Issue 1: Validity of assignment deed in favor of Financial Creditor The Asset Reconstruction Company (India) Limited (ARCIL) filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) against the Corporate Debtor. The appellant argued that the assignment deed in favor of ARCIL was invalid as per the Debt Recovery Tribunal, Ahmedabad's decision. The appellant contended that since the assignment deed was declared invalid, the application under Section 7 of the IBC was not maintainable. The appellant also highlighted that the assignment was made prior to the Board Resolution, rendering it invalid. The appellant relied on the decision of the Supreme Court to assert that the Limitation Act is applicable to applications under Sections 7 and 9 of the IBC. Issue 2: Barred claim by limitation under the Insolvency & Bankruptcy Code The Respondent, ARCIL, argued that there was no denial of debt and default by the Corporate Debtor or the appellant. ARCIL stated that the Debt Recovery Tribunal's order had been set aside by the Gujarat High Court, which the appellant failed to disclose. ARCIL also mentioned that the debt was not barred by limitation, as settlement proposals were made by the Corporate Debtor to clear the debts. The Respondent emphasized that the right to file an application under Section 7 of the IBC accrued after the Code came into force on 1st December, 2016, and thus, the application could not be considered time-barred. Issue 3: Requirement of Board Resolution for assignment validity The appellant argued that the assignment deed was invalid as it was assigned before the Board Resolution, which was passed later. However, the Respondent contended that there was no requirement of a Board Resolution for the assignment and provided the Power of Attorney of the relevant officer of ARCIL as evidence. The Respondent also highlighted that the Corporate Debtor had offered settlement proposals to clear the debts, indicating acknowledgment of the debt. In conclusion, the Appellate Tribunal held that the claim of ARCIL was not barred by limitation, considering the assignment deed's validity and the settlement proposals offered by the Corporate Debtor. The appeal was dismissed, and no costs were awarded.
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