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2018 (5) TMI 736 - AT - Insolvency and BankruptcyLimitation Act, 1963 applicability for initiation of corporate resolution process - whether I & B Code is a self-contained Code or not? - provision of computing the period of limitation prescribed for any suit? - Held that - In view of the decision in M/s. Speculum Plast Pvt. Ltd. (2017 (12) TMI 454 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI), we hold that the Adjudicating Authority was wrong in holding that the application was barred by limitation. Limitation Act, 1963 is not applicable for initiation of Corporate Insolvency Resolution Process . If an application under Section 433 is transferred, it is to be seen whether within the time prescribed the applicant provided all information other than relevant information(s) as per the I & B Code and as required to be furnished in requisite form prescribe under Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. - Also for treating the application as an application under Section 9, it is to be seen as to whether the applicant had issued notice under Section 8(1) and received a reply under Section 8(2) of the I &B Code. If notice has been issued and reply has been received, then only it can be seen whether there is an existence of dispute . All these issues are required to be noticed from the records and, therefore, we are not going to deliberate on such issues at this stage. For the reasons aforesaid, we remit the case to the Adjudicating Authority (National Company law Tribunal), Chennai passed and will reconsider the issue after notice to the parties.
Issues:
1. Application under Section 433 of the Companies Act, 1956 transferred to Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016. 2. Applicability of the Limitation Act, 1963 for initiation of corporate resolution process under I&B Code. 3. Consideration of delay in filing applications under Section 7 or 9 of the I&B Code. 4. Transfer of pending winding up petitions to the National Company Law Tribunal. 5. Requirements for treating an application under Section 433 as an application under Section 9 of the I&B Code. 6. Necessity of issuing notice under Section 8(1) and existence of dispute for treating an application as under Section 9 of the I&B Code. Analysis: 1. The appellant filed an application under Section 433 of the Companies Act, 1956, which was transferred to the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority rejected the application as barred by limitation, but the Appellate Tribunal disagreed based on previous judgments. 2. The Appellate Tribunal referred to a previous judgment to clarify that while the Limitation Act, 1963 does not apply to the initiation of the corporate insolvency resolution process, the Doctrine of Limitation and Prescription is crucial in determining whether an application under Section 7 or 9 can be entertained after a significant delay, considering laches and the forfeiture of claims. 3. The Tribunal emphasized that a delay of more than three years may require the applicant to explain the delay to determine laches. It stated that stale claims without a valid explanation for delay should not trigger the corporate insolvency resolution process under Sections 7 and 9 of the I&B Code. 4. The judgment also highlighted the transfer of pending winding up petitions to the National Company Law Tribunal under specific rules, emphasizing the need for compliance with the Insolvency and Bankruptcy rules for admission of petitions under Sections 7, 8, or 9 of the Code. 5. The Tribunal discussed the requirements for treating an application under Section 433 as an application under Section 9 of the I&B Code, emphasizing the need for issuing notices under Section 8(1) and receiving replies under Section 8(2) to determine the existence of disputes. 6. It was concluded that the case should be remitted back to the Adjudicating Authority for reconsideration, with specific instructions to examine whether the necessary notices were issued under Section 8(1) and if there is any existence of dispute, ensuring compliance with the relevant rules and procedures under the Insolvency and Bankruptcy Code.
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