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2019 (11) TMI 1509 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Time Limitation - HELD THAT - This Adjudicating Authority do not find any reasons to admit the case under Section 7 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process. Time Limitation - HELD THAT - This Application is filed before this Adjudicating Authority on 31.01.2019, when the case against the Corporate Debtor was decreed on 17.05.2005, it is beyond 12 years and the Recovery Proceedings is still going on before the DRT, Mumbai from 2005 onwards. Moreover, the Limitation Act is applicable to the application filed under Section 7 of Insolvency and Bankruptcy Code, 2016 from the inception of the Code. Hence, Section 137 of the Limitation Act gets attracted to this Petition. This Adjudicating Authority is also of the view that this Tribunal is not for recovery of dues and the possibility of finding any Corporate Insolvency Resolution Plan for the Corporate Debtor is not in sight, (a) when the suit was filed against the Corporate Debtor 22 years back in 1996; (b) the recovery proceedings is going on for last 14 years from 2005; (c) the Respondent Company's Registered Office/Corporate Office is closed/left; (d) notice could not be served to the Corporate Debtor and no one from Corporate Debtor appeared before this Adjudicating Authority despite paper publication. Petition disposed off.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Default in repayment of loan/credit facilities. 3. Validity and enforceability of the Deed of Assignment. 4. Limitation period for filing the application under Section 7 of the Insolvency and Bankruptcy Code, 2016. 5. Service of notice and non-appearance of the Corporate Debtor. Detailed Analysis: Issue 1: Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016 The Financial Creditor, International Asset Reconstruction Co. Pvt. Ltd., filed the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against the Corporate Debtor, Jayant Vitamins Ltd., for default in repayment of the loan/credit facilities. Issue 2: Default in repayment of loan/credit facilities The Corporate Debtor availed various loan facilities from Bank of Baroda, which were subsequently assigned to the Financial Creditor. The Corporate Debtor defaulted in repayment, with the date of default being 13.09.1996. The Financial Creditor claimed dues of ?103,49,90,511.35 as on 30.11.2018. Issue 3: Validity and enforceability of the Deed of Assignment The debts of the Corporate Debtor were assigned to the Financial Creditor through a Registered Deed of Assignment dated 08.02.2018. The Financial Creditor was substituted in place of Bank of Baroda in the pending legal proceedings, and there was no dispute regarding the validity of the Deed of Assignment. Issue 4: Limitation period for filing the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 The application was filed on 31.01.2019, while the case against the Corporate Debtor was decreed on 17.05.2005. The Tribunal observed that the application was beyond the 12-year limitation period as per Section 137 of the Limitation Act. The Tribunal relied on the judgments of the Hon'ble Supreme Court in B.K. Educational Services (P) Ltd. v. Parag Gupta and Associates and Vashdeo R Bhojwani vs. Abhyudaya Co-operative Bank Ltd., which held that the Limitation Act applies to applications under Section 7 and Section 9 of the Insolvency and Bankruptcy Code, 2016, from the date of default or cause of action. Issue 5: Service of notice and non-appearance of the Corporate Debtor The Tribunal directed the Petitioner to serve notice to the Corporate Debtor, but the notices were returned with remarks 'firm has closed' and 'left'. Despite paper publication, the Corporate Debtor did not appear on any occasion. Conclusion: The Tribunal rejected the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, considering the following points: 1. The application was filed beyond the 12-year limitation period. 2. The Tribunal is not a forum for recovery of dues, and the possibility of finding a Corporate Insolvency Resolution Plan was not in sight given the long duration since the suit was filed, ongoing recovery proceedings, closure of the Corporate Debtor's office, and non-appearance of the Corporate Debtor. The petition was disposed of with no costs.
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