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2021 (6) TMI 789 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Homebuyer/Flat Allottee - existence of debt and dispute or not - time limitation - seeking extension of time period based on subsequent payments - HELD THAT - The applicant had entered into an agreement on 13.10.2007 for purchase of a flat and accordingly, he was allotted Flat No. 06 of Jasmine-I, Upper Ground Floor in the project Hindon Heights - A bare perusal of the Sections 18 and 19 of Limitation Act show that for the purpose of extending the period of limitation under both the provisions, the acknowledgement of debt or payment of debt amount, must be made only before the expiration of the prescribed period of the limitation and not thereafter. Mere plain reading of the provision shows that the application must be filed within three years from the date when the right to apply accrues - when the case in hand is considered, it is noticed that the first date of default is 02.11.2013 and therefore, the application should have been filed within three years from the first date of default of 02.11.2013, i.e., on or before 01/11/2016. Similarly, part payment of debt or acknowledgment of debt should have been made within this period, i.e. on or before 01/11/2016. Admittedly, the subsequently part amount of ₹ 200000/- is paid after the expiry of three years from the limitation period - in view of Section 19 of the Limitation Act, on the basis of the subsequent payment, the period of limitation cannot be extended. The present application is barred by limitation - the present application stands dismissed on the point of Limitation.
Issues:
- Application under Section 7 of the Insolvency & Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process. - Default in delivering possession of a flat by the Corporate Debtor to the Financial Creditor. - Compromise agreement between the Corporate Debtor and the Financial Creditor. - Payment made by the Corporate Debtor to the Financial Creditor. - Calculation of limitation period under the Limitation Act, 1963. Analysis: 1. Application under Section 7 of the Insolvency & Bankruptcy Code: The petition was filed seeking initiation of Corporate Insolvency Resolution Process due to the Corporate Debtor's inability to liquidate financial debt. The Financial Creditor had made payments for a flat but possession was not delivered within the agreed timeline. 2. Default in delivering possession: The Corporate Debtor failed to hand over the flat within the stipulated time, leading to a compromise agreement in 2013 where the Corporate Debtor agreed to refund all payments made by the Financial Creditor. Despite partial payments, possession was not delivered as agreed. 3. Compromise agreement: A compromise deed was executed where the Corporate Debtor agreed to refund all amounts paid by the Financial Creditor and clear outstanding EMIs. However, the Corporate Debtor failed to honor the terms of the compromise agreement fully. 4. Payment made by the Corporate Debtor: The Corporate Debtor made partial payments to the Financial Creditor in 2013 and 2018, acknowledging the debt. The Financial Creditor argued that the application was filed within the limitation period based on these payments. 5. Calculation of limitation period: The Tribunal referred to Sections 18 and 19 of the Limitation Act, which require acknowledgment or payment of debt within the prescribed limitation period. The application was found to be filed beyond the limitation period, making it barred by limitation. The subsequent payment made by the Corporate Debtor did not extend the limitation period as per the Act. 6. Judgment: The Tribunal dismissed the application on the grounds of limitation, stating that since it was not maintainable due to being time-barred, there was no need to consider other grounds raised by the applicant. The dismissal was based on the application being filed after the expiration of the limitation period, as per the provisions of the Limitation Act, 1963.
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