2019 (6) TMI 1333 - SC - Insolvency and Bankruptcy

Admissibility of petition - time limitation - Section 7 of the I. B. Code - HELD THAT - Indisputably, neither the National Company Law Tribunal nor the National Company Law Appellate Tribunal, in the present case, has examined the said contention. Indeed, according to the respondent, the plea of claim being barred by limitation is unstatable and, to buttress this argument, the respondent has relied upon the entries in the books of account of the appellant and other related documents. However, that is a matter which ought to be agitated before the National Company Law Appellate Tribunal in the first place. Accordingly, we relegate the parties before the National Company Law Appellate Tribunal for fresh consideration of the objection raised by the appellant that the claim of the respondent is barred by limitation. The appellant is granted liberty to file additional affidavit in the remanded appeal, giving the factual matrix on the basis of which the ground of limitation is founded, so that the respondent can meet that case appropriately. The impugned order is set aside and the parties are relegated before the National Company Law Appellate Tribunal by remanding the stated appeal for deciding the issue of limitation as aforementioned - Appeal allowed.

Summary

Issues involved:
Appeal against National Company Law Appellate Tribunal's judgment on the admission of a company petition under Section 7 of the I&B Code, objection of claim being barred by limitation, need for fresh consideration of limitation issue by the National Company Law Appellate Tribunal.

Analysis:
The Supreme Court heard an appeal challenging the judgment of the National Company Law Appellate Tribunal (NCLAT) regarding the admission of a company petition under Section 7 of the Insolvency and Bankruptcy (I&B) Code. The appellant contended that the respondent's claim was time-barred, citing a default in 2011 and the petition being filed in 2018. The Court noted that the objection of limitation is crucial as it pertains to the jurisdiction of the National Company Law Tribunal (NCLT) to proceed with the claim. Referring to a previous decision, the Court emphasized the applicability of the limitation issue to applications under Section 7 of the I&B Code. The Court found that neither the NCLT nor the NCLAT had examined the limitation contention, leading to the decision to remand the case for fresh consideration of the objection raised by the appellant regarding the claim being barred by limitation.

The Court directed the parties to present their arguments on the limitation issue before the NCLAT, granting the appellant the opportunity to file an additional affidavit supporting the limitation ground. The appellant was instructed to submit the affidavit by a specified date, and the respondents were given one week to respond. The Court emphasized the need for an expeditious decision by the NCLAT, preferably within five weeks, and maintained the interim relief granted earlier for a specific period. Ultimately, the Court allowed the appeal, set aside the impugned order, and referred the case back to the NCLAT for a fresh determination on the limitation issue, without imposing any costs.