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2020 (12) TMI 320 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT - The Operational Creditor had served a Demand Notice in Form 3 dated 18-6-2018 to the Corporate Debtor (Exhibit '1', pp. 12-18) in terms of section 8 of the IBC. The Corporate Debtor has not replied to the Demand Notice. Section 69(2) of the Indian Partnership Act, 1932 would apply only to a 'suit' and not to proceedings. Applications filed under the IBC are not 'suits' but only proceedings, and therefore, the bar in terms of section 69(2) of the Indian Partnership Act, 1932, would not apply to applications filed under the IBC. Time Limitation - HELD THAT - Article 137 of the Limitation Act, 1963 stipulates a limitation period of three years from the date on which the right to apply accrues - The date of default is stated to be 23-6-2015 and the petition was filed on 25-9-2018 - Noting that there is no acknowledgement of liability in terms of section 18 of the Limitation Act, 1963, before the expiry of the period of limitation, the present petition is barred by limitation. Petition dismissed.
Issues:
1. Maintainability of the petition under section 69(2) of the Indian Partnership Act, 1932. 2. Limitation period for filing the petition under the Insolvency & Bankruptcy Code, 2016. Analysis: Maintainability of the petition under section 69(2) of the Indian Partnership Act, 1932: The Operational Creditor filed a Company Petition under section 9 of the Insolvency & Bankruptcy Code, 2016 against the Corporate Debtor for non-payment of dues. The Corporate Debtor raised objections regarding the maintainability of the petition under section 69(2) of the Indian Partnership Act, 1932. The Corporate Debtor argued that the petition cannot be maintained due to the non-registration of the partnership firm. However, the Tribunal clarified that section 69(2) of the Indian Partnership Act, 1932 applies to suits and not to proceedings under the IBC. Therefore, the bar under this provision does not affect applications filed under the IBC. Limitation period for filing the petition under the Insolvency & Bankruptcy Code, 2016: The Corporate Debtor contended that the petition was time-barred as it was filed after the expiration of the limitation period. The Tribunal referred to legal precedents, including the BK Educational Services case, to establish that the limitation period for such applications is three years from the date the right to apply accrues. In this case, the default date was 23-6-2015, and the petition was filed on 25-9-2018, exceeding the limitation period. Considering the absence of an acknowledgment of liability within the limitation period, the Tribunal held that the petition was barred by limitation and subsequently rejected it. In conclusion, the Tribunal dismissed the petition based on the grounds of being time-barred due to the limitation period exceeding three years. The maintainability of the petition under section 69(2) of the Indian Partnership Act, 1932 was also addressed, clarifying that such provisions do not apply to proceedings under the Insolvency & Bankruptcy Code, 2016. The judgment emphasized that the observations made should not prejudice the petitioner's right to seek recourse in other judicial forums.
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