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2021 (3) TMI 126 - HC - Insolvency and BankruptcyInitiation of CIRP - Period of limitation - NPA - Jurisdiction of Tribunal to admit application - HELD THAT - That article 137 in the Limitation Act, 1963 would apply for the purpose of the bank's application made before the Tribunal, is undisputed. On perusal of the impugned order, it appears that the bank had asserted, the bar of limitation did not apply as the corporate debtor had made acknowledgments in its balance-sheets, acknowledgments as in section 18 of the Limitation Act, for the period of limitation being extended - The court is convinced that the mandate of the Limitation Act is for dismissal of, inter alia, an application such as the bank's, on having been brought more than three years after right to sue accrued. The Tribunal, on the facts, lacked jurisdiction to admit it. The impugned order dated August 19, 2020 is set aside and quashed.
Issues involved:
1. Jurisdiction of the National Company Law Tribunal to admit an application under section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Application of the Limitation Act, 1963 in determining the timeline for filing the application. 3. Availability of statutory appeal as a remedy and the High Court's interference under article 226/227 despite the existence of a statutory remedy. 4. Impact of the declaration of NPA on the timeline for filing the application. 5. Effect of delay in filing the petition and challenges faced due to the pandemic. Analysis: Issue 1: Jurisdiction of the National Company Law Tribunal The petitioner challenged the jurisdiction of the Tribunal to admit the application under section 7 of the Insolvency and Bankruptcy Code, 2016. The petitioner argued that the application was time-barred as it was filed more than three years after the right to sue accrued. The court referred to relevant Supreme Court judgments emphasizing the importance of adhering to the limitation period for such applications. The court concluded that the Tribunal lacked jurisdiction to admit the application due to being time-barred. Issue 2: Application of the Limitation Act The court examined the application of the Limitation Act, 1963 in determining the timeline for filing the application. The petitioner relied on Supreme Court judgments to support the argument that the application was time-barred as it was filed more than three years after the default occurred. The court noted that there was no condonation of delay by the impugned order, despite an application under section 5 being made. The court concluded that the application should have been dismissed as it was brought after the limitation period. Issue 3: Statutory Appeal and High Court Interference The respondent argued that the petitioner had a statutory right of appeal and that the High Court should not interfere with the Tribunal's decision. The court considered relevant Supreme Court judgments highlighting the distinction between lack of jurisdiction and wrongful exercise of jurisdiction. The court concluded that despite the availability of a statutory remedy, interference was warranted in this case due to the Tribunal lacking jurisdiction to admit the application. Issue 4: Impact of NPA Declaration The petitioner argued that the timeline for filing the application should be calculated from the date of declaration of the borrower's account as NPA. The court noted the Supreme Court's judgment on this issue and concluded that the application was time-barred based on the date of declaration as NPA. Issue 5: Effect of Delay and Pandemic The petitioner cited the delay in filing the petition and challenges faced due to the pandemic as reasons for the delay. The court considered these arguments but found them unsubstantiated, especially in light of the Supreme Court's cognizance of the pandemic's impact on limitation periods. The court set aside the impugned orders based on the lack of jurisdiction and dismissed the petition. This detailed analysis of the judgment highlights the key issues involved and the court's reasoning behind its decision to set aside the impugned orders.
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