2023 (12) TMI 1217 - AT - Insolvency and Bankruptcy

Maintainability of section 7 application - time limitation - dispute raised regarding the liability of the Corporate Debtor towards the Financial Creditors and the guarantee by the Respondent - HELD THAT - This is one such case in which direction has to be issued to the Tribunal to admit the application filed under Section 7 of the Code in view of the findings recorded by the Tribunal in its order dated 25.03.2022 wherein it has been held that the debt and default both are present in this case but the Tribunal did not admit the application only on the issue that the Application was found to be barred by limitation. The question of limitation was taken to the higher court and ultimately it has been proved that the application was within the limitation. In such circumstances, the Tribunal should not have gone in for further investigating on the issue as to whether there is debt and default in the present case for the purpose of admission of the application. The Tribunal is directed to admit the application filed by the Appellant on the next date of hearing and pass further necessary orders in accordance with law - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment include the dismissal of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 on the ground of limitation, subsequent appeals and challenges in higher courts, and the restoration of the main company petition.

Summary of Judgment:

1. The appeal was directed against an order where the Tribunal proceeded with the matter instead of admitting the application filed under Section 7 of the Insolvency and Bankruptcy Code, despite a previous finding of debt and default on the part of the Respondent but dismissal on the issue of limitation.

2. The Appellant filed an application under Section 7 of the Code against the Respondent for the resolution of a debt amount. The Tribunal found a debt and default but dismissed the application on the grounds of limitation due to the filing being beyond the prescribed time frame.

3. The Tribunal specifically dealt with the issue of limitation and concluded that the petition was time-barred under the Limitation Act, 1963, leading to the dismissal of the Company Petition.

4. The Appellant challenged the Tribunal's order in a higher court, which found no dispute regarding the liability of the Corporate Debtor and allowed the appeal, deeming the previous order as illegal.

5. Subsequent appeals and challenges in higher courts were made, with the Supreme Court dismissing the appeal and a review petition being filed by the Corporate Debtor.

6. An application for revival and restoration of the main petition was filed, leading to the Tribunal allowing the application and restoring the main company petition for further proceedings.

7. The Tribunal, after subsequent hearings, directed the Respondent to make final submissions and granted a final opportunity for the Corporate Debtor to present its case.

8. The Tribunal ultimately directed to admit the application filed by the Appellant and pass further necessary orders in accordance with the law, given the findings of debt and default in the case, and adjourned the case for compliance and further proceedings.

This summary provides a detailed overview of the issues involved in the judgment, the proceedings, and the final directives of the Tribunal.