9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 68 - AT - Insolvency and BankruptcyInitiation of CIRP for the resolution of an unresolved financial debt - NCLT Admitted to the application - time limitation - it is alleged that though the Financial Creditor had mentioned that the default occurred on 31.03.2014 but the date of default mentioned in part IV of the application filed under Section 7 of the Code is 01.06.2015. HELD THAT - In the present case, the claim w.e.f. 01.06.2015 till 01.06.2018 was live because the Financial Creditor could have filed a petition under Section 7 of the Code during this period and the occurrence of one time settlement/compromise, initiated at the instance of the Corporate Debtor during this period vide its letter dated 31.01.2018 had revived the period of limitation from 31.01.2018 to 31.01.2021 in terms of Section 18 of the Limitation Act and the application under Section 7 of the Code having been filed on 15.01.2021 is thus within the period of limitation. In the given facts and circumstances of the case Vidarbha Industries Power Limited 2022 (7) TMI 581 - SUPREME COURT , relied upon by the Appellant, is not applicable because there is a clear admission on the part of the Corporate Debtor of the amount of debt due in view of the letter dated 31.01.2018. The Hon ble Supreme Court in the case of M. SURESH KUMAR REDDY VERSUS CANARA BANK ORS. 2023 (5) TMI 570 - SUPREME COURT has held that it was clarified by the order in review that the decision in the case of Vidarbha Industries was in the setting of facts of the case before this court. Hence, the decision in the case of Vidarbha Industries cannot be read and understood as taking a view which is contrary to the view taken in the cases of Innovative Industries and E.S. Krishnamurthy 2021 (12) TMI 683 - SUPREME COURT . The view taken in the case of Innovative Industries still holds good. There is hardly any merit in these two appeals which do not require any interference and therefore, the present appeals are hereby dismissed.
Issues Involved:
1. Maintainability of Application under Section 7 of the Insolvency and Bankruptcy Code (IBC) on the ground of limitation. 2. Simultaneous initiation of Corporate Insolvency Resolution Process (CIRP) against both the borrower and the guarantor for the same debt. 3. Discretionary power of the Adjudicating Authority under Section 7(5)(a) of the IBC. Summary: Issue 1: Maintainability of Application under Section 7 of the IBC on the ground of limitation The Appellant argued that the application under Section 7 was barred by limitation as the default date mentioned was 01.06.2015, and the application was filed on 15.01.2021, beyond the three-year limitation period. The Respondent countered that the Corporate Debtor acknowledged its debt in a compromise letter dated 31.01.2018, thus extending the limitation period under Section 18 of the Limitation Act. The Tribunal held that the acknowledgment of debt revived the limitation period, making the application filed on 15.01.2021 within the permissible period. Issue 2: Simultaneous initiation of CIRP against both the borrower and the guarantor for the same debt The Corporate Debtor contended that the Financial Creditor cannot file claims in two separate CIRPs for the same debt, citing the NCLAT decision in Dr. Vishnu Agarwal Vs. Piramal Enterprises Limited. The Tribunal referred to the case of State Bank of India Vs. Athena Energy Venture Pvt. Ltd., which allowed CIRP against both the borrower and the guarantor. The Tribunal found no error in rejecting the Appellant's argument, emphasizing that the law permits filing claims in CIRP against both entities. Issue 3: Discretionary power of the Adjudicating Authority under Section 7(5)(a) of the IBC The Appellant argued that the Adjudicating Authority should have exercised its discretion under Section 7(5)(a) of the IBC, as highlighted in Vidarbha Industries Power Limited v. Axis Bank Limited. The Tribunal, however, noted that the Supreme Court's review in Vidarbha clarified that its decision was context-specific and did not override the principles established in Innovative Industries and E.S. Krishnamurthy. The Tribunal concluded that given the clear admission of debt by the Corporate Debtor, the discretionary power argument was inapplicable. Conclusion: The Tribunal dismissed both appeals, affirming the maintainability of the application under Section 7 of the IBC within the limitation period, validating simultaneous CIRP against both borrower and guarantor, and rejecting the discretionary power argument due to clear debt admission. The appeals were dismissed without any order as to costs.
|
