2020 (12) TMI 319 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - In sum - (a) The date of default is 30.06.2014. (b) The balance confirmation letter placed on record is dated 30.06.2013. See page 19 of the Petition (c) The letter informing the Corporate Debtor about the accounts having become NPA is dated 13.11.2014. See p.2117 of the Petition (d) There is nothing on record to show that there is any acknowledgement of debt after the accounts were declared as NPA on 13.11.2014. (e) The OTS proposal is dated 01.08.2018, See page 14 of the reply i.e., long after the expiry of the prescribed period of limitation. The present petition filed byUCO Bank against Deegee Orchards Private Limited is barred by limitation - Petition dismissed.

Summary

Issues involved:
Company Petition under section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) by UCO Bank (Financial Creditor) against Deegee Orchards Private Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP).

Detailed Analysis:

1. Jurisdiction and Background:
The Corporate Debtor is a private company incorporated under the Companies Act, 1913. The petition was filed due to the Corporate Debtor's failure to pay a substantial amount as principal and interest, leading to the initiation of CIRP. The Financial Creditor provided various facilities to the Corporate Debtor, supported by relevant documents and certificates.

2. Contentions of the Parties:
The Financial Creditor alleged default and debt, while the Corporate Debtor claimed negotiations for debt restructuring and a one-time settlement (OTS) proposal. The Financial Creditor argued that the petition should be admitted based on the occurrence of default.

3. Limitation Issue and Legal Precedents:
The Tribunal considered the limitation aspect, citing legal precedents such as B.K. Educational Services and other Supreme Court judgments. The date of default was crucial, and the Tribunal analyzed the timeline of events, including the OTS proposal date and the absence of debt acknowledgment after the default date.

4. Judicial Interpretation and Conclusion:
Relying on legal principles from various Supreme Court and NCLAT judgments, the Tribunal concluded that the petition was time-barred due to the expiration of the limitation period. The Tribunal emphasized that the OTS proposal submitted after the limitation period's expiry could not be relied upon. Consequently, the petition by UCO Bank against the Corporate Debtor was rejected on grounds of being barred by limitation.

5. Final Order and Observations:
The Tribunal clarified that the rejection of the petition did not prejudice the petitioner's rights to approach other judicial forums. The order was communicated to the parties as per the provisions of the IBC, ensuring transparency and compliance with legal procedures. The Tribunal's decision was based on a thorough analysis of legal principles and factual circumstances, highlighting the importance of adherence to limitation periods in insolvency proceedings.