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2020 (10) TMI 823 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - whether the claim of the financial creditor is barred by law of limitation? - HELD THAT - The default had admittedly occurred on 31.08.2012 and the present application has been filed on 26.10.2018, prima facie, this application is barred by limitation since it has been filed beyond limitation period. A look at the statement of accounts related to the account of the Corporate Debtor indicates that the above said deposit was not part payment towards the loan amount liable to be paid by the Corporate Debtor but was deposited by the Allahabad Bank. Accordingly, the submission on the side of the Financial Creditor that fresh period of limitation would start from 18.03.2016 is found devoid of any merit - No other argument was advanced on either side. Though the application filed is complete as per section 7(5) of the Code, the claim being found barred by law of limitation this application is liable to be dismissed. Application dismissed.
Issues:
- Application for initiating corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016. - Amendment of cause title due to merger of Financial Creditor. - Default in repayment of loan by Corporate Debtor. - Objections raised by Corporate Debtor regarding maintainability and limitation of claim. - Determination of whether the claim is barred by the law of limitation. Analysis: 1. The application was filed by Dena Bank to initiate insolvency proceedings against the Corporate Debtor for defaulting on a loan of Rs. 25,00,00,000. Bank of Baroda later filed to amend the cause title due to the merger of the Financial Creditor. The Financial Creditor alleged default in repayment of loans from multiple banks, leading to a total outstanding amount of Rs. 56,19,65,082 as of 30.09.2018. 2. The Corporate Debtor contended that the application was an abuse of process, not maintainable, and an attempt to wrongfully recover money. The Corporate Debtor argued that the application was filed beyond the limitation period and challenged the competency of the Power of Attorney holder to initiate proceedings. The Corporate Debtor also highlighted parallel proceedings initiated by the Financial Creditor at another tribunal. 3. The Tribunal considered whether the claim was time-barred. The Financial Creditor argued a fresh period of limitation started from a partial repayment made by the Corporate Debtor in 2016. However, the Corporate Debtor claimed the repayment was made by a consortium bank from the sale proceeds of the Corporate Debtor's property, not by the Corporate Debtor itself. 4. The Tribunal referred to Section 19 of the Limitation Act, determining that the payment made after the expiry of the prescribed period did not extend the limitation period. The ledger accounts showed the payment was made by the consortium bank, not the Corporate Debtor. As the claim was found to be barred by the law of limitation, the application was dismissed, with parties directed to bear their respective costs. 5. The Tribunal issued directions for communication of the order to the Operational Creditor and Corporate Debtor. Certified copies of the order were to be provided upon application. The judgment emphasized the importance of compliance with formalities and the dismissal of the application due to limitation issues.
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