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2022 (2) TMI 1406 - AT - Insolvency and BankruptcyRejection of Section 7 application - right to take remedy before RERA as well as under Section 7 of the Code - Continuing cause of action - time limitation - HELD THAT - The fact that Appellant was not given possession of the shops by the Corporate Debtor may be ground and reason for filing complaint under Real Estate Regulatory Authority Act before UP RERA which complaint has already been filed by the Appellant and was allowed on 06.03.2019 but for filing Application under Section 7, Application has to be within three years from the date when right to apply accrues. When default of a financial debt was committed on 24.10.2010 as claimed by the Appellant, the right to apply accrue to him and no other date of default having been given in Part-IV, the limitation shall not stop running merely because Appellant claims that he has not been given possession of the shops. The Application was thus clearly barred by time and could not have been entertained by the Adjudicating Authority. The Application having been filed beyond three years from the date when right to apply accrues, the same deserves to be rejected. Thus, on the complaint filed by the Appellant, an order has been passed by the UP RERA on 06.03.2019 directing for recovery of amount of Rs. 87,38,000/- along with interest/. The Appellant has already filed Execution Application to execute the order dated 06.03.2019 which as per submission of the counsel for the Appellant has already been allowed on 18.11.2021. There are no reason to interfere with the order passed by the Adjudicating Authority dismissing Section 7 Application filed by the Appellant - appeal dismissed.
Issues:
- Appeal against rejection of Application under Section 7 of the 'I&B Code' - Calculation of default date and limitation period under Article 137 of the Limitation Act - Continuing cause of action for filing the Application under Section 7 - Right to avail remedies under Real Estate Regulatory Authority (RERA) and IBC - Fresh period of limitation after the order passed by UP RERA Analysis: 1. The appeal was filed against the rejection of an Application under Section 7 of the 'I&B Code' by the Adjudicating Authority, based on an order dated 07.01.2021. The Appellant claimed dues of Rs. 87,38,000 deposited for the cost of shops through a Buyers' Agreement dated 24.02.2009. 2. The Appellant himself indicated the default date as 24.10.2010 in the Application. The limitation for filing under Section 7 is within three years from when the right to apply accrues, as per Article 137 of the Limitation Act. The Appellant argued a continuing cause of action due to non-possession of the shops. 3. The Counsel for the Appellant contended that the Appellant had the right to avail all remedies under the law, including actions under RERA and IBC. However, the Tribunal emphasized that the Application was time-barred as it was filed beyond the three-year limitation period from the default date. 4. The Tribunal noted that the Appellant's claim of a fresh limitation period after the UP RERA order dated 06.03.2019 was not substantiated in the Section 7 Application. The Application was thus rejected as it was filed beyond the statutory limitation period, despite the Appellant's argument of a continuing cause of action. 5. The Tribunal highlighted that the Appellant had already obtained an order from UP RERA for recovery of the claimed amount, and an Execution Application had been filed and allowed. Consequently, the Tribunal upheld the Adjudicating Authority's decision to dismiss the Section 7 Application, as there was no legal basis for interference. 6. In conclusion, the Tribunal dismissed the appeal, affirming the rejection of the Application under Section 7 of the 'I&B Code' due to being time-barred and lacking a valid legal foundation for a fresh limitation period post the UP RERA order.
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