2019 (12) TMI 1362 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - time limitation - HELD THAT - Corporate Debtor/Respondent Company has not produced any documentary proof with respect to the averments made in the One Time Settlement proposal or failure on the side of Financial Creditor to consider their proposal. While on this existence of the debt is proved as mentioned in the order passed by the Debts Recovery Tribunal and other documents produced before this Adjudicating Authority otherwise there is a mere allegation of dispute. The Respondent/Corporate Debtor could not produce any proof before this Tribunal so as to disprove its debt and default. Time Limitation - it has been alleged that the present application is barred by limitation as the claim pertains to loan sanctioned in the year 2005 and the mortgage extended in favour of the Petitioner as security was given in the year 2005 - HELD THAT - Even though the right to sue accrues for the Financial Creditor on the date of NPA i.e. 29.06.2013 the Hon ble NCLAT in SESH NATH SINGH AKHSAR KUMAR SINGH VERSUS BAIDYABATI SHEORAPHULI COOPERATIVE BANK LTD ANIMESH MUKHOPADHYAY 2020 (2) TMI 286 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI has held that in computing the period of limitation the time during which the Financial Creditor has been prosecuting with due diligence another civil proceedings against the corporate debtor for the same relief shall be excluded as per Section 14(2) of the Limitation Act 1963. Even otherwise the Financial Creditor has obtained a Debt Recovery Certificate against the Corporate Debtor and in view of the Judgment of the Hon ble Supreme Court in the matter of VASHDEO R BHOJWANI VERSUS ABHYUDAYA CO-OPERATIVE BANK LTD AND ANR. 2019 (9) TMI 711 - SUPREME COURT it is clear that the period of limitation would begin ticking from the date of issuance of the Recovery Certificate as in this case since the Recovery Certificate was issued by on 24.01.2019 and based on the recovery certificate issued the Financial Creditor has filed the present petition before this Authority on 15.04.2019. In view of the same the present petition falls well within the period of limitation. The Application as filed by the Applicant - Financial Creditor is required to be admitted under Section 7 (5) of the I B Code 2016 - Application admitted - moratorium declared.

Summary

Issues:
1. Application filed invoking Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Details of Financial Creditor and Corporate Debtor.
3. Amount of debt and default.
4. Particulars of Financial Debt and evidence of default.
5. Counter statement by the Corporate Debtor.
6. Proof of debt and default.
7. Limitation period for filing the application.
8. Admission of the application under Section 7 of the I&B Code, 2016.
9. Appointment of Interim Resolution Professional (IRP).
10. Moratorium under Section 14 of the I&B Code, 2016.

Analysis:

1. The application was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor against the Corporate Debtor. The Financial Creditor, a bank, detailed the debt amount and default claim in the application, supported by relevant documents, including orders from the Debts Recovery Tribunal and other credit-related documents.

2. The Corporate Debtor filed a counter statement alleging inaccuracies in the application and raised issues regarding the conversion of loan amounts, limitation period, and the intention to settle the dispute amicably. However, the Corporate Debtor failed to provide documentary proof to support their claims, while the Financial Creditor substantiated the debt and default through various documents.

3. The Tribunal examined the evidence presented by both parties and found that the Corporate Debtor failed to disprove the debt and default. Regarding the limitation period, the Tribunal considered the date of NPA and exclusion of time spent in other civil proceedings, ultimately concluding that the application was filed within the limitation period.

4. Based on the facts and legal provisions, the Tribunal admitted the application under Section 7 of the I&B Code, 2016. An Interim Resolution Professional (IRP) was appointed to oversee the Corporate Insolvency Resolution Process, and the powers of the Board of Directors of the Corporate Debtor were superseded.

5. The admission of the application triggered a moratorium under Section 14 of the I&B Code, 2016, affecting legal actions against the Corporate Debtor, asset transfers, security enforcement, and property recovery. Essential goods or services supply to the Corporate Debtor during the moratorium period was protected, and the duration of the moratorium was specified until the completion of the Corporate Insolvency Resolution Process.