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2019 (11) TMI 1537 - Tri - Insolvency and BankruptcyMaintainability of petition - assignment of debt of the Corporate Debtor which has been granted to a 3rd party - competency of the Petitioner to file this Petition - HELD THAT - Considering the definition of a 'Financial Creditor' as given under Section 5(7) of the I B Code, 2016 discloses that Financial Creditor means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred. It is evident from the above definition of the Financial Creditor that either the person to whom the financial debt is owed as defined under Section 5(8) of the provisions of the I B Code, 2016 or in the case an assignment legally assigned, then such person can approach this Tribunal seeking for the enforcement of the claim before this Tribunal. As per the instant case the debt has been assigned, the assignee is the party who is to come before this Tribunal who has not, hence we find credence in the submission of the Learned Counsel for the Corporate Debtor in relation to the maintainability of the Petition filed by the Petitioner. Counsel for the Corporate Debtor also brings to the notice of this Tribunal that eventhough an Arbitration award was passed by the Learned Arbitrator in relation to the claim filed out of the above mortgage deed and the debts reflected thereunder in favour of the Petitioner, however, in relation to the arbitration award passed by the Learned Arbitrator, Learned Counsel for the Corporate Debtor brings to the notice of this Tribunal that an Application under Section 34 of the Arbitration Conciliation Act, 1996 has been preferred before the Hon'ble High Court of Madras which has also granted a stay of the award vide its order dated 02.03.2017. Petition dismissed.
Issues:
1. Locus standi of the Petitioner in the absence of representation. 2. Assignment of debt and competency of the Petitioner as a Financial Creditor. 3. Limitation period for filing the claim under the Insolvency and Bankruptcy Code, 2016. 4. Impact of an Arbitration award and stay order on the enforceability of the debt. Analysis: Issue 1: Locus standi of the Petitioner The Tribunal noted the absence of representation by the Petitioner during the hearing despite being available earlier. The Corporate Debtor's Counsel was present, leading the Tribunal to proceed with the hearing in the Petitioner's absence. Issue 2: Assignment of debt and competency of the Petitioner The Corporate Debtor's Counsel argued that the Petitioner lacked locus standi due to the assignment of debt to a third party, as evidenced by documents provided. The Tribunal observed that under the Insolvency and Bankruptcy Code, a Financial Creditor includes a person to whom a debt has been legally assigned. As the debt had been assigned, the assignee should approach the Tribunal, not the Petitioner. Issue 3: Limitation period for filing the claim The Tribunal considered the limitation period for filing the claim under the Insolvency and Bankruptcy Code. Referring to legal precedents, it highlighted that the claim, originating from a document executed in 2009, was time-barred as per the applicable Article under the Limitation Act. The Tribunal emphasized the distinction between a suit and an application under the Code, leading to the claim being deemed time-barred. Issue 4: Impact of an Arbitration award and stay order The Corporate Debtor's Counsel informed the Tribunal about an Arbitration award related to the claim, which was stayed by the High Court. Due to the stay order, the debt claimed was not payable, and no default existed under the Code. Considering this, the Tribunal dismissed the Petition without costs, as the debt was not enforceable until the stay was vacated. In conclusion, the Tribunal dismissed the Petition due to the absence of the Petitioner, the assignment of debt to a third party, the claim being time-barred, and the impact of the stay order on the enforceability of the debt. The decision was made in line with the provisions of the Insolvency and Bankruptcy Code and relevant legal precedents.
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