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2024 (5) TMI 784 - AT - Insolvency and BankruptcyInitiation of CIRP - maintainability of application filed under Section 7 of IBC - application beyond the period of limitation - HELD THAT - Three home buyers initiated the legal proceedings under the Code by filing the application under Section 7 which was admitted on 20.08.2019. Since, the CIRP was initiated against the Company as a whole (Corporate Debtor), therefore, the homebuyers of Dreamz Sneh Project also filed their claims to the IRP which were admitted. However, by a subsequent order dated 04.09.2020, the CIRP initiated was ordered to be confined to only one project, namely, Dreamz Sumadhur Porject. As a result thereof, a separate cause of action arose to the Appellant for the purpose of redressal of their grievance with the passing of the order dated 04.09.2020 and therefore, they filed the application under Section 7 on 19.08.2021 within a period of three years from the date of cause of action 04.09.2020 had arisen. The arguments raised by the Appellant is that the limitation can be extended only under Section 18 and 19 of the limitation Act, cannot be accepted because of the decision of the Hon ble Supreme Court in the case of Dena Bank 2021 (8) TMI 315 - SUPREME COURT . It has been held that the limitation can be counted from the date of the judgment or decree. There are no error in the impugned order in so far as the issue of limitation has been decided which has only been challenged in this appeal, therefore, the present appeal is found devoid of merit and the same is hereby dismissed.
Issues Involved:
The issues involved in this judgment are the challenge to the validity of an order passed under Section 7 of the Insolvency and Bankruptcy Code, 2016, the admission of an application by the National Company Law Tribunal, Bengaluru Bench, and the appointment of an Interim Resolution Professional. Validity of Order Under Section 7 of the Code: The Appellant, the Managing Director of the Corporate Debtor, challenged the validity of an order dated 15.02.2023 passed in CP (IB) No. 83/BB/2021 under Section 7 of the Insolvency and Bankruptcy Code, 2016. The order admitted an application filed by M/s Dreamz Sneh Project Allottees Welfare Association, appointing an Interim Resolution Professional. Subsequently, an application was filed seeking certain reliefs, leading to the modification of the order appointing a different IRP. The appeal was filed on the grounds that the application was beyond the period of limitation. Confined Corporate Insolvency Resolution Process: In a separate case, three home buyers filed an application under Section 7 of the Code to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor. The CIRP was initiated against the Company as a whole, including various projects. However, by an order dated 04.09.2020, the CIRP was confined to only one project, Dreamz Sumadhur Project. Subsequently, home buyers of another project, Dreamz Sneh Project, filed a separate application under Section 7, which was admitted. The issue of limitation arose, with arguments presented regarding the date of the cause of action and the applicability of Sections 18 and 19 of the Limitation Act. Limitation and Judicial Interpretation: The Tribunal considered the limitation aspect, noting that the application was filed within the period of limitation based on the cause of action arising from earlier orders. Arguments were raised regarding the extension of limitation under Sections 18 and 19 of the Limitation Act. Reference was made to a Supreme Court decision regarding the counting of limitation from the date of judgment or decree. The Tribunal found no error in the impugned order concerning the limitation issue, leading to the dismissal of the appeal.
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