2019 (8) TMI 268 - AT - Insolvency and Bankruptcy

Admissibility of petition - it is alleged that the claim of the Bank and the date of default both are barred by limitation - HELD THAT - The I B Code having come into force since 1st December, 2016 and the application having been filed on 24th October, 2018, the application under Section 7 is well within the time and is not barred by limitation - Further, as the default has occurred after notice issued on 13th November, 2015 and application having been filed on 24th October, 2018, the claim is also not barred by limitation. The impugned order dated 25th February, 2019 upheld - appeal dismissed.

Summary

Issues:
1. Limitation period for filing appeal under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Classification of loan as Non-Performing Asset (NPA) and default date.
3. Applicability of Article 137 of the Limitation Act, 1963.

Analysis:
1. The appeal was filed against the order admitting an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Adjudicating Authority. The Appellant argued that the bank's claim and the date of default were barred by limitation. However, the Tribunal rejected this submission.

2. The loan of the Corporate Debtor was classified as a Non-Performing Asset (NPA) on 30th June, 2015, in line with the Reserve Bank of India guidelines. Despite a recall notice issued on 13th November, 2015, and subsequent failure to repay the amount, the application under Section 7 was filed on 24th October, 2018. This timeline was crucial in determining the limitation period.

3. Regarding the limitation period, the Tribunal referred to Article 137 of the Limitation Act, 1963, which applies to "Any other application for which no period of limitation is provided elsewhere." Since the Insolvency and Bankruptcy Code came into force on 1st December, 2016, and the application was filed on 24th October, 2018, the Tribunal concluded that the application was within the prescribed time limit and not barred by limitation. Additionally, the default date post the notice issued on 13th November, 2015, and the subsequent application filing on 24th October, 2018, further supported the finding that the claim was not time-barred.

In conclusion, the Tribunal dismissed the appeal, stating that the application under Section 7 was filed within the prescribed time limit and was not barred by limitation. The decision was based on the specific timeline of events and the application of Article 137 of the Limitation Act, 1963.