9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 1284 - Tri - IBCMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - legally enforceable debt or not - time limitation - applicant claims that the default occurred on 28.08.2014 and the applicant sent notice under Section 13(2) of SARFAESI Act on 25.11.2014 and notice under section 13(4) of the SARFAESI Act on 04.08.2015. HELD THAT - The account of the corporate debtor was declared NPA on 28.08.2014 whereas the application under Section 7 of I B Code has been filed on 6th June 2018 i.e. after three years from the date of accrual of cause of action. Hon ble Supreme Court in the case of B.K. Educational Services Pvt. Ltd. vs. Parag Gupta and Associates 2018 (10) TMI 777 - SUPREME COURT held that the Limitation Act is applicable to applications filed under section 7 and 9 of the Code from the inception of the Code Article 137 of the Limitation Act gets attracted. The right to sue therefore accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application the application would be barred under Article 137 of the Limitation Act save and except in those cases where in the facts of the case Section 5 of the Limitation Act may be applied to condone the delay in filing such applications. In the instant case the applicant has filed the application under Section 7 of the I B Code on 6th June 2018 after three years from the date of accrual of cause of action i.e. 26.03.2014. Thus the application filed under Section 7 of I B Code is apparently time barred - In the case on hand 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. The petition is dismissed with no cost.
Issues:
- Time-barred application under Section 7 of The Insolvency and Bankruptcy Code, 2016. Analysis: The judgment delivered by the Tribunal pertained to a petition filed under section 7 of The Insolvency and Bankruptcy Code, 2016. The applicant, State Bank of India, sought insolvency proceedings against the corporate debtor, M/s. Kakhani Metal Private Limited, due to default on a loan granted on 29.01.2011. The debt was claimed to be not legally enforceable as it was time-barred. The respondent raised objections, primarily arguing that the application was time-barred. The Tribunal considered the timeline of events, noting that the default occurred on 28.08.2014, and the application was filed on 6th June, 2018, well after the three-year period as per the Limitation Act, 1963. The Tribunal highlighted that the debt claimed by the applicant was indeed time-barred under the Limitation Act, as no action had been taken to recover the debt after 04.08.2015, which was crucial in determining the enforceability of the claim. Referring to legal precedents, including the case of B.K. Educational Services Pvt. Ltd. vs. Parag Gupta and Associates, the Tribunal emphasized that the right to sue accrues when a default occurs, and applications filed beyond the limitation period are not maintainable unless exceptional circumstances warrant the application of Section 5 of the Limitation Act to condone the delay. Moreover, the Tribunal cited the case of Gaurav Hargovindbai Dave vs. Asset Reconstruction Company (India) Ltd. & Anr. to establish that applications under Section 7 fall under the residuary Article 137 of the Limitation Act, making it clear that the application in question was time-barred. The judgment also referenced the recent case of Vashdeo R Bhojwani vs. Abhyudaya Co-operative Bank Ltd. & Anr., reinforcing that the intent of the Insolvency and Bankruptcy Code is not to revive time-barred debts. In conclusion, the Tribunal dismissed the petition, ruling that the application under Section 7 of the Insolvency and Bankruptcy Code was not maintainable due to being time-barred under the Limitation Act. The Tribunal emphasized the importance of adhering to statutory limitations in such insolvency proceedings and communicated the decision to both the financial creditor and the corporate debtor.
|
