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2023 (11) TMI 313 - AT - Insolvency and BankruptcyDismissal of application for initiation of CIRP - time limitation under Section 61(2) of the IBC, 2016 - default occurred in the period excluded as per the provisions of Section 10A of the IBC, 2016 - invocation of Corporate Guarantee - HELD THAT - In the Judgement of this Tribunal in the case of VIKRAM KUMAR, PROPRIETOR VERSUS ARANCA (MUMBAI) PRIVATE LIMITED 2023 (11) TMI 51 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI , it was held that the date of default in the case of the Guarantor is the date on which the Guarantee was invoked. By its action of depositing the security cheques and issue of Notice dated 31.01.2022, the Financial Creditor, the Appellant herein, is deemed to have invoked the Corporate Guarantee in the month of January, 2022, which is to be considered as the date of default, and which lies beyond the period prohibited under Section 10A of the IBC, 2016. In the light of the detailed discussion, it is concluded that the date of default lies beyond the prohibited period prescribed under Section 10A of the IBC, 2016. The Adjudicating Authority is directed to hear and decide the Application of the Financial Creditor under Section 7 by treating it as a case not covered by the provisions of Section 10A of the IBC, 2016. Considering the loss of time, it is expected that the said Application will be decided by the Adjudicating Authority expeditiously - appeal allowed.
Issues Involved:
1. Maintainability of the Appeal considering the period of Limitation under Section 61(2) of the IBC, 2016. 2. Determination of the date of default for the invocation of a Corporate Guarantee under Section 10A of the IBC, 2016. Summary: Issue 1: Maintainability of the Appeal considering the period of Limitation under Section 61(2) of the IBC, 2016. The Appellant filed the Appeal on 12.05.2023 against the Impugned Order dated 21.03.2023, which partly rectified the Order dated 17.01.2023. The Respondent argued that the Appeal was not maintainable as it was filed beyond the period of limitation prescribed under Section 61(2) of the IBC, 2016. The Appellant contended that the Appeal was within the 30-day period from the date of the rectified Order, excluding the time taken to obtain the certified copy. The Tribunal referenced sub-Rule (2) of Rule 22 of the NCLAT Rules, 2016, and Section 12 of the Limitation Act, 1963, which allow the exclusion of time taken to obtain a certified copy of the Order. Citing the Supreme Court's decision in the case of `Sanket Kumar Agarwal & Anr. Vs. APG Logistics Private Limited`, the Tribunal concluded that the Appeal was filed within the permissible time frame and was maintainable. Issue 2: Determination of the date of default for the invocation of a Corporate Guarantee under Section 10A of the IBC, 2016. The Appellant had disbursed a loan of Rs.1,50,00,000/- to the Principal Borrower for a project, with the Respondent acting as a Corporate Guarantor. The Principal Borrower failed to repay the loan, leading the Appellant to deposit security cheques, which were dishonored. The Appellant issued a Notice to the Respondent on 31.01.2022, invoking the Guarantee. The Respondent argued that the original repayment period fell within the period excluded by Section 10A of the IBC, 2016, thus preventing the initiation of CIRP. The Tribunal examined the Loan Agreement and confirmed that the Respondent was indeed a Corporate Guarantor. It held that the date of default for the Corporate Guarantor is the date of invocation of the Guarantee, which in this case was January 2022, a period not covered by Section 10A of the IBC, 2016. The Tribunal referenced its previous decisions, including `Pooja Ramesh Singh vs. State Bank of India` and `JC Flowers Asset Reconstruction Private Limited vs. Deserve Exim Private Limited`, to support this conclusion. Conclusion: The Tribunal directed the Adjudicating Authority to hear and decide the Application of the Financial Creditor under Section 7 of the IBC, treating it as a case not covered by the provisions of Section 10A. The Appeal was allowed, and the matter was to be decided expeditiously by the Adjudicating Authority.
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