2021 (7) TMI 876 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors or not - existence of debt and dispute or not - time limitation - HELD THAT - It is evident from the Part 2 of Form 1 which has been filed by Financial Creditor that no date of default has been mentioned in the Form 1. Hence, on perusal of the application filed under section 7 of IBC, 2016, the date of default can be ascertained as 22.12.2014, the date on which the Corporate Debtor sent a mail to the financial Creditor accepting that the said project has been delayed and acknowledged the liability. Whereas, the financial Creditor has filed the present application under section 7 of IBC, 2016 on 21.11.2019. The Present application filed under section 7 of the IBC, Code, 2016 fails the test of Limitation as far as the Code is concerned as it is clearly evident that the date of default i.e., 22.12.2014 had occurred over three years prior to the date of filing of application i.e., 21.11.2019, thus, the present application is time barred. Petition dismissed.

Summary

Issues involved:
- Application for corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016 for alleged default in payment.
- Test of Limitation for the application.

Analysis:
1. The application was filed to initiate corporate insolvency resolution process against a company for defaulting on a payment of ?8,57,000. The applicant invested in a project named "Emerald Rivera" by the respondent, a Building and Construction Company. Various transactions and agreements were detailed, including payment schedules and booking amounts.

2. The respondent did not appear despite notice, leading to an ex-parte order. The counsel for the applicant argued that the application did not meet the threshold set by the Supreme Court in a related case, as it involved a financial commitment rather than a builder-buyer agreement.

3. The Tribunal reviewed the documents and arguments presented. The applicant claimed a default of ?8,57,000 by the respondent. The issue of Limitation was raised, as the application was filed in 2019 for a default that occurred in 2014. The date of default was determined as 22.12.2014, based on communication between the parties.

4. The Tribunal found that the application failed the Limitation test as per the Supreme Court criterion, as the default occurred over three years before the application was filed. Therefore, the application was deemed time-barred and was dismissed.

5. In conclusion, the Tribunal dismissed the petition after considering the arguments, documents, and the Limitation aspect. The application did not meet the required criteria and was found to be time-barred based on the date of default, leading to the dismissal of the case.