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2020 (9) TMI 15 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and default - Time Limitation - HELD THAT - As per the record, the date of default date of (declaration) of NPA, i.e. 30.11.2013. Hence, the limitation in the present matter would start from as per the Article 137 of the Limitation Act from the date of default, i.e. the date of declaring NPA viz. 30.11.2013, while the present I.B. Petition was filed on 15.12.2017 before this court. Hence, it is filed beyond the limitation. The Hon'ble Supreme Court further in the matter of Vashdeo R. Bhojwani Vs. Abhyudaya Co-operative Bank Ltd. Ors. 2019 (9) TMI 711 - SUPREME COURT has pleased to hold that the limitation/cause of action starts from the date of default by declaring NPA and not from the date of issue of a recovery certificate if issued by the DRT and in such case, only Article 137 would apply. Thus, the Hon'ble Supreme Court pleased to dismiss the I.B. Petition being time barred. This Adjudicating Authority need not to examine merits or to go into the controversy in the present I.B. Petition -The matter can be simply disposed of on the ground of the limitation. As the present I.B. Petition is found to be filed beyond Limitation i.e., three years from the date of default, i.e. date of declaration of NPA and date of recalling of notice, i.e. 14.02.2014. Hence, it is held that it is hit by limitation and cannot be entertained - Petition dismissed.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Authorization of the Petitioner to file the petition 3. Completeness of the application under Section 7 of the Insolvency and Bankruptcy Code (IBC) 4. Limitation period for filing the petition Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The Petitioner, M/s. Phoenix ARC Private Limited, acting as a trustee of M/s. Phoenix Trust FY - 14-9, filed the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against the Corporate Debtor, M/s. Nagaur Water Supply Company Private Limited. The Corporate Debtor had availed financial facilities amounting to ?40 Crore from L&T Infrastructure Finance Ltd., which was to be repaid in 120 structured monthly installments with an interest rate of 13% per annum. The outstanding amount as of 30.11.2017 was ?74,22,55,644. The financial assets of the Corporate Debtor were assigned to the Petitioner by L&T Infrastructure Finance Co. Ltd. via an Assignment Agreement dated 30.12.2013. 2. Authorization of the Petitioner to file the petition: The Respondent contended that the Petitioner, Phoenix ARC Pvt. Ltd., was not properly authorized to file the petition as the assignment agreement was between L&T Infrastructure Finance Co. Ltd. and Phoenix Trust FY 14-9, not Phoenix ARC Pvt. Ltd. The Respondent argued that a member of the trust cannot act on behalf of the trust without proper authorization from all trust members, as the trust is not a corporate entity. The Tribunal, however, allowed the Petitioner to furnish relevant documents to clarify the authorization issue. 3. Completeness of the application under Section 7 of the Insolvency and Bankruptcy Code (IBC): The Respondent argued that the application was incomplete as the Petitioner did not produce a copy of the Deed of Trust. The Tribunal granted the Petitioner time to furnish the necessary documents, which were subsequently taken on record. The Respondent further contended that the defects were not cured within the prescribed period under the IBC, and no application for condonation of delay was filed, making the application incomplete. 4. Limitation period for filing the petition: The primary issue considered by the Tribunal was the limitation period. The date of default, i.e., the declaration of the Non-Performing Asset (NPA), was 30.11.2013. The petition was filed on 15.12.2017, beyond the three-year limitation period stipulated under Article 137 of the Limitation Act. The Tribunal referenced several Supreme Court judgments, including B.K. Educational Services Pvt. Ltd. vs. Parag Gupta, Gaurav Hargovindbhai Dave vs. Asset Reconstruction Company (India) Ltd., and Vashdeo R. Bhojwani vs. Abhyudaya Co-operative Bank Ltd., which clarified that the limitation period for applications under Sections 7 and 9 of the IBC is three years from the date of default. The Tribunal concluded that the petition was time-barred and could not be entertained. Conclusion: The Tribunal rejected the petition on the grounds that it was filed beyond the limitation period. No order as to costs was made.
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