2019 (4) TMI 392 - AT - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process - proof of pre-existing dispute - claim barred by limitation - HELD THAT - We hold that the claim of appellant is not barred by limitation, for the reasons already noticed on 11th December, 2018 and recorded above. The Adjudicating Authority failed to appreciate the relevant facts while passing the impugned order. For the reasons aforesaid, we set aside the impugned order dated 17th August, 2018 and remit the matter to the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench, Ahmedabad to admit the application under Section 9 in absence of any pre-existing dispute and paper being complete, after notice to the Respondent to enable the Respondent to settle the matter before admission of the application under Section 9 of I&B Code, if it so decides.

Summary

Issues:
Application under Section 9 of Insolvency and Bankruptcy Code, 2016 dismissed on ground of limitation.

Analysis:
The Appellant filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. However, the Adjudicating Authority dismissed the application citing limitation as the reason.

The Appellant argued that the claim was not time-barred, referring to an agreement between the parties, a winding-up petition, and a Debt Settlement Agreement. The Debt Settlement Agreement and the High Court order acknowledged the settlement, indicating that the claim was not barred by limitation prima facie.

Despite notice, the Respondent did not appear. The Tribunal issued a fresh notice by email and permitted dasti service. If the Respondent failed to appear, the Tribunal would proceed ex-parte based on the records and observations made.

Subsequently, notice was issued through email and dasti service was made on all four Directors of the Corporate Debtor. However, there was no appearance or reply from the Corporate Debtor.

After considering the arguments and documents, the Tribunal held that the claim was not time-barred. It was concluded that the Adjudicating Authority failed to appreciate the relevant facts while passing the impugned order.

Consequently, the Tribunal set aside the impugned order and remitted the matter back to the Adjudicating Authority for admission of the application under Section 9. The Respondent was given an opportunity to settle the matter before the application's admission.

The appeal was allowed with the aforementioned observations and directions, with no costs imposed.