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2019 (10) TMI 209 - AT - Insolvency and BankruptcyAdmissibility of application - initiation of CIRP - Corporate Debtor - default in repayment - time limitation - HELD THAT - Admittedly, I B Code has come into force since 1st December, 2016, therefore, the right to apply accrued to 1st Respondent on 1st December, 2016. Therefore, we hold that the application under Section 7 was not barred by limitation. Whether the claim of the Appellant is barred by the limitation? - If it is barred by limitation then the Corporate Debtor has right to take plea that the debt is not payable? - HELD THAT - The immovable property of the Corporate Debtor was mortgaged in favour of the Financial Creditor by Deed of Mortgage and a further charge was made on 27th November, 2009 by the Corporate Debtor in favour of IDFC Ltd. . Thereafter by assignment agreement debt payable by Corporate Debtor to IDFC was assigned on 11th September, 2014. The Financial Creditor has right to get immovable property mortgaged and thereafter may transfer the mortgage assets for a valuable consideration for which 12 years of limitation has been prescribed for filing a suit relating to immovable property under Article 61 of Part V of the First Division of the Schedule of Limitation Act. Therefore, we hold that the claim of the 1st Respondent is not barred by limitation. Appeal dismissed.
Issues:
1. Maintainability of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 during the pendency of the decision of a Joint Lenders Forum or finalization of the corrective action plan. 2. Whether the claim of the applicant under Section 7 was barred by limitation. 3. Whether the claim of the Appellant was barred by limitation. 4. Validity of the assignment agreement and the rights of the Financial Creditor. Issue 1 - Maintainability of the application under Section 7: The Adjudicating Authority admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by the 1st Respondent against the Corporate Debtor. The Appellants (Shareholders/Directors) expressed readiness to settle the claim with the creditors. However, as no settlement was reached, the matter was heard, and the Appellants were given additional time to settle the matter. The Tribunal held that there was no bar to entertain an application under Section 7 during the pendency of a decision by a Joint Lenders Forum or finalization of a corrective action plan. Issue 2 - Limitation of the application under Section 7: The application under Section 7 was filed by the 1st Respondent on 1st December 2016. The Tribunal determined that the application was not barred by limitation under the Limitation Act, 1963, as the right to apply accrued to the 1st Respondent on the enforcement of the Insolvency and Bankruptcy Code on 1st December 2016. Issue 3 - Limitation of the claim of the Appellant: The claim of the Appellant was also examined for limitation. The Tribunal found that the claim was not barred by limitation as the immovable property of the Corporate Debtor was mortgaged in favor of the Financial Creditor, and the debt payable was assigned to the 1st Respondent by an assignment agreement. The Tribunal held that the claim of the 1st Respondent was not time-barred. Issue 4 - Validity of the assignment agreement and rights of the Financial Creditor: The Tribunal considered the assignment agreement where the debt owed by the Corporate Debtor was assigned to the 1st Respondent by IDFC Ltd. The Financial Creditor had the right to mortgage the immovable property and transfer the mortgage assets. The Tribunal determined that the claim of the 1st Respondent was valid and not barred by limitation. In conclusion, the appeal was dismissed as it was found to be devoid of merit, and no relief was granted to the Appellants.
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