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2020 (1) TMI 1256 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - NPA - Financial Debt - existence of debt and dispute or not - time limitation - HELD THAT - The account of the corporate debtor was declared NPA on 30.11.2010 whereas the application under Section 7 of I B Code has been filed on 29th May 2018 i.e. after eight years from the date of accrual of cause of action - In the instant case the applicant has filed the application under Section 7 of the I B Code on 29th May 2018 after eight years from the date of accrual of cause of action i.e. 30.11.2010. Thus the application filed under Section 7 of I B Code is apparently time barred. In the case on hand the cause of action arose on 31.01.2013 when the last payment was made by the corporate debtor though date of default was 30.11.2010 but thereafter no acknowledgement was made by the corporate debtor and/or obtained by the applicant before expiration of three years as required in Section 18 of the Limitation Act therefore the application is barred by limitation as it fall under article 137 of the Limitation Act which is a residuary article. Application not maintainable and is dismissed.
Issues:
1. Application under Section 7 of The Insolvency and Bankruptcy Code, 2016 seeking reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code. 2. Default in repayment by the corporate debtor. 3. Time limitation for filing the insolvency resolution application. Analysis: Issue 1: Application under Section 7 of The Insolvency and Bankruptcy Code, 2016 The case involved an application filed by the Chief Manager of Punjab National Bank, the lead bank for a consortium of lender banks, under Section 7 of The Insolvency and Bankruptcy Code, 2016 seeking reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code against the corporate debtor, M/s. Banyan and Berry Alloys Limited. The financial creditor submitted that the corporate debtor was in default of a substantial amount against the total loan sanctioned, leading to the initiation of the corporate insolvency resolution process. Issue 2: Default in Repayment by the Corporate Debtor The financial creditor provided evidence of default by the corporate debtor, stating that despite various financial credit facilities granted, the respondent company failed to repay the outstanding debt. The account of the corporate debtor was declared Non-Performing Asset (NPA) on a specific date, and the application highlighted the default amounts and the inability of the corporate debtor to repay the debt. Issue 3: Time Limitation for Filing the Insolvency Resolution Application The Tribunal analyzed the time limitation aspect concerning the application filed under Section 7 of the Insolvency and Bankruptcy Code. It was noted that the application was filed after eight years from the date of accrual of cause of action, which raised concerns regarding the application being time-barred under the Limitation Act. Citing relevant legal precedents, including judgments by the Hon'ble Supreme Court, the Tribunal concluded that the application fell under Article 137 of the Limitation Act, making it time-barred. The lack of acknowledgment of liability within the prescribed period further supported the dismissal of the application on grounds of limitation. In conclusion, the Tribunal dismissed the insolvency resolution application as it was deemed time-barred under the Limitation Act, emphasizing the importance of adhering to statutory limitations in such proceedings.
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