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2020 (1) TMI 1217 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - debt due and default or not - time limitation - Section 7 of Insolvency and Bankruptcy Code, 2016 - HELD THAT - Proceeding under Section 7 of IBC is an Application . Considering Section 18 of the Limitation Act, 1963, when the documents relied by the Respondent Bank are considered, it can be seen that if the Account became NPA on 15.01.2013, there was reply sent by the Corporate Debtor to the Bank on 05.02.23013 which contained acknowledgment for the debt. As per Section 18 of the Limitation Act, 1963, fresh period of limitation shall be computed from the time when the acknowledgment was signed. Then there is a letter dated 03.02.2016 (Annexjure-R1, diary No. 17183) within three years of the earlier dated 05.02.2013 and thus it would give fresh period of limitation. Section 7 Application thus filed on 31.07.2018 could not be said to be time barred. Although the learned Counsel for the parties are at Bar questioning each other as to which or the other Acknowledgement was filed before the Adjudicating Authority, we are not entering into that technicality of procedure as fact remains in this matter that the Appellant before us is not disputing the genuineness of the issuance of such letters/acknowledgments. We are not relying on Article 62 of the Limitation Act which Adjudicating Authority did. But we rely on above reasons to hold the Application under Section 7 of IBC to be within limitation. Appeal dismissed.
Issues:
- Whether the Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 was time-barred? - Whether the acknowledgments provided by the Corporate Debtor protected the Bank under Section 18 of the Limitation Act, 1963? Analysis: 1. The Appellant challenged the Impugned Order admitting the Application under Section 7 of the IBC by the Adjudicating Authority. The Appellant argued that the Application was time-barred based on the Judgment of the Supreme Court in a specific case. The Bank had sent a Notice in 2013 declaring the Account as NPA due to defaults on loans and bank guarantees. The Appellant contended that the Application filed in 2018 was beyond the limitation period under the Limitation Act, 1963. 2. The Respondent's Counsel argued that the Bank had provided acknowledgments from the Corporate Debtor, extending the limitation period under Section 18 of the Limitation Act. The Bank submitted documents showing acknowledgments and argued that these protected them from the limitation defense raised by the Appellant. 3. The Appellant objected to the acknowledgment documents, claiming they were not filed before the Adjudicating Authority. However, the Respondent clarified that these documents were part of a separate application before the Debt Recovery Tribunal and were submitted to the Adjudicating Authority. 4. The Respondent's Counsel highlighted specific acknowledgments by the Corporate Debtor, showing that fresh limitation periods were triggered, allowing the Application filed in 2018 to be within the limitation period. The Respondent relied on the provisions of Section 18 of the Limitation Act to support their argument. 5. The Appellant raised concerns about the withdrawal of a settlement offer by the Corporate Debtor, questioning the validity of certain acknowledgments. However, the Tribunal emphasized that the acknowledgments provided by the Corporate Debtor were valid under Section 18 of the Limitation Act, ensuring the Application's timeliness under the IBC. 6. Ultimately, the Tribunal dismissed the Appeal, ruling that the Application under Section 7 of the IBC was not time-barred. The decision was based on the acknowledgments provided by the Corporate Debtor, which extended the limitation period as per the provisions of the Limitation Act, 1963. The Tribunal did not rely on the specific article of the Limitation Act but upheld the Application's validity based on the acknowledgments, disregarding technical procedural disputes between the parties.
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