2022 (3) TMI 1570 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - time limitation - HELD THAT - When the last payment was made on 31st July, 2018, the Application filed on 28th August, 2020 was well within three years from the last payment. The submission of the Appellant that Application was barred by time cannot be accepted. The payment details regarding the payment was already the part of the Application which has been brought on record along with the Application and from such details regarding the payment when the Adjudicating Authority has noticed the submissions that last payment was made on 31st July, 2018, the Application cannot be said to be barred by time. The default and debt were proved, on that basis the Application was admitted. In the present case, Part-IV of the Section 7 Application of the IBC, Date of Default is dated 25th August, 2017 there is no dispute regarding that but along with the Application the relevant documents including ledger account of the payment were also brought on record where the last payment made by the Corporate Debtor has been mentioned on 31.07.2018 and the same has been noticed by the Adjudicating Authority. In view of the last payment made on 31.07.2018 as noted above, the Application was well within time and the Financial Creditor entitled for taking benefit of 3 years period of limitation from the date of last payment. The Judgment relied on by the Learned Counsel for the Appellant in Babulal Vardharji Gurjar Vs. Veer Gurjar Aluminium Industries Pvt. Ltd. Anr. 2020 (8) TMI 345 - SUPREME COURT does not come to any aid to the Appellant in the present case, as in that case, Hon ble Apex Court has held that the date of default has to be ascertained on the basis of pleadings in Section 7 Application of the IBC. There are no merit in the appeal - appeal dismissed.

Summary

Issues:
- Appeal against the Order dated 18th February, 2022 passed by the Adjudicating Authority in CP No. 1258/MB/I&B/2020 under Section 7 of the Insolvency and Bankruptcy Code, 2016.
- Barred by time due to 'Date of Default' mentioned as 25th August, 2017, and the Application filed on 28th August, 2020.

Analysis:
1. The appeal was filed against the Order passed by the Adjudicating Authority under Section 7 of the Insolvency and Bankruptcy Code, 2016. The issue raised was that the Application was barred by time as the 'Date of Default' was mentioned as 25th August, 2017, and the Application was filed on 28th August, 2020.

2. The Appellant argued that the Application was time-barred since it was filed after three years from the 'Date of Default.' However, the Adjudicating Authority, in its Order, noted that the last payment by the Corporate Debtor was made on 31st July, 2018. As the Application was filed on 28th August, 2020, within three years from the last payment, it was not barred by time.

3. The Adjudicating Authority emphasized that the details of the last payment were part of the Application itself and were considered during the proceedings. The Authority found that since the last payment was made within three years of the Application filing date, the Application was well within the limitation period. The Adjudicating Authority rejected the argument that the Application was time-barred based on these findings.

4. The Appellant cited a Supreme Court judgment to support their argument regarding the date of default. However, the Tribunal distinguished the present case by highlighting that the relevant documents, including the ledger account showing the last payment on 31st July, 2018, were submitted with the Application. The Tribunal concluded that the Appellant was entitled to the benefit of the 3-year limitation period from the date of the last payment.

5. In light of the above analysis, the Tribunal dismissed the Appeal, finding no merit in the argument that the Application was barred by time. The decision was based on the fact that the Application was filed within three years from the date of the last payment, as evidenced by the records submitted during the proceedings.