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2021 (5) TMI 412 - Tri - Insolvency and BankruptcyMaintainability of application - time limitation - case of respondent is that the claim of the Applicant from November 2013 is categorically barred by limitation since there was no communication from the Applicant as per the own admission after 21.09.2016 and the CIRP in respect of the Corporate Debtor was initiated on 05.05.2020 - HELD THAT - The Applicant has not placed on record any document after 21.09.2016 in order to show that the claim of the Applicant falls within the period of Limitation. It is seen that the CIRP in relation to the Corporate Debtor was initiated on 05.05.2020 and the claim of the Applicant relates to the year 2014. By taking into consideration the provisions of Section 238A of IBC 2016 is hopelessly barred by limitation as rightly pointed out by Learned Counsel for Respondent and also Learned Counsel for Applicant has not placed on record any document to show that he has obtained any acknowledgment after the year 2016. The Applicant in the present case would not be in a position to approach the Civil Court by way of a suit for recovery of money as the claim amount admittedly falls beyond the prescribed period of limitation and thereby by filing the present Application under Section 60(5) of IBC 2016 cannot seek to enforce a claim which is time barred as per the provisions of the Limitation Act 1963 on the date of initiation of the CIRP itself. Hence also on the said count the Application as filed by the Applicant is liable to be dismissed. It is also relevant to refer to the decision of the Hon ble Supreme Court of India in the matter of B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES 2018 (10) TMI 777 - SUPREME COURT wherein it has held that Limitation Act is applicable since the inception of the Code while posing itself with a query as to whether the Limitation Act 1963 will apply to Applications that are made under Section 7 and or Section 9 of the Code on and from its commencement on 01.12.2016 to 06.06.2018 (date of amendment of insertion of Section 238-A coming into effect). It was clearly held that the Code could not have been to give a new lease of life to debts which are time barred and have thereby gone to give a finding by taking into consideration the above noted Report that the Limitation Act is applicable from the inception of the Code. The Respondent has rightly rejected the claim made by the Applicant in this regard and as such we are of the view that the rejection order passed by the Respondent does not warrant any interference - Application dismissed.
Issues:
Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking to set aside the rejection of the claim by the Respondent. Detailed Analysis: 1. Claim for Rent Arrears: - Applicant claimed rent arrears from the Corporate Debtor for a period of 62 months, totaling to ?98,01,683/-, with an additional interest of ?56,15,000/-. - Applicant submitted that the Corporate Debtor failed to pay rent from November 2013 to January 2019, despite commitments to clear the dues. - The Respondent rejected the claim citing that the lease deed was unregistered, making the claim inadmissible as per Section 17(b) of the Registration Act, 1908. 2. Limitation Period: - Respondent argued that the claim from November 2013 was time-barred as there was no communication from the Applicant after 21.09.2016, and the CIRP against the Corporate Debtor was initiated on 05.05.2020. - The Tribunal noted that the claim fell within the period of limitation, and the Applicant failed to provide any document to show acknowledgment or pursuit of the arrears after 2016. 3. Applicability of Limitation Act: - The Tribunal referred to the decision of the Supreme Court in B.K. Educational Services case, highlighting the applicability of the Limitation Act to claims made under the IBC, 2016. - Emphasized that the Code aims to prevent the revival of time-barred debts and claims, and the Limitation Act applies from the inception of the IBC, 2016. 4. Dismissal of Application: - The Tribunal dismissed the Applicant's claim, stating that the rejection by the Respondent was justified and did not require interference. - Due to the claim being time-barred and beyond the limitation period, the Applicant could not enforce the claim under Section 60(5) of the IBC, 2016. - The Application against the rejection of the claim was dismissed without any costs incurred by either party. In conclusion, the Tribunal upheld the rejection of the claim by the Respondent due to the claim being time-barred and falling outside the limitation period, emphasizing the importance of adhering to the provisions of the Limitation Act in insolvency proceedings.
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