Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2021 (5) TMI Tri This

  • Login
  • Cases Cited
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2021 (5) TMI 539 - Tri - Insolvency and Bankruptcy


Issues Involved:
1. Maintainability of the petition.
2. Limitation period for filing the petition.
3. Authority to file the petition.
4. Allegations of misappropriation of funds.
5. Sufficiency of stamp duty on the loan agreement.

Issue-wise Detailed Analysis:

1. Maintainability of the Petition:
The Corporate Debtor argued that the Petitioner, being a cooperative society, should resolve disputes under Section 72 of the Maharashtra Cooperative Societies Act, 1960, and that the petition was filed beyond the three-year limitation period. The Tribunal examined the application of Section 18 and 19 of the Limitation Act, 1963, to proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC). It was established that both sections are applicable, and the acknowledgment of debt by the Corporate Debtor in a letter dated 23.07.2019 reset the limitation period. Consequently, the petition filed on 09.03.2020 was within the limitation period.

2. Limitation Period for Filing the Petition:
The Tribunal noted that the date of default was 01.02.2016, and the petition was filed on 09.03.2020. However, the acknowledgment of debt by the Corporate Debtor in a letter to the Commissioner, Cooperative Department of Maharashtra, and the last payment made on 31.03.2017 extended the limitation period under Sections 18 and 19 of the Limitation Act. The Tribunal concluded that the petition was not time-barred.

3. Authority to File the Petition:
The Corporate Debtor contended that the petition was filed without express authority from the general body of the Petitioner. The Petitioner clarified that no Administrator was appointed, and the Board had authorized the filing of the petition through a resolution dated 03.12.2019. The Tribunal found this contention insufficient to dismiss the petition, as the primary consideration was the existence of a financial debt and default.

4. Allegations of Misappropriation of Funds:
The Corporate Debtor alleged that the Petitioner’s Director induced them to part with ?98,58,000/- on the loan disbursement date. The Tribunal noted that any transaction between the Corporate Debtor and an individual Director could not form the basis for admitting or rejecting the application under the IBC. Moreover, the complaint filed by the Corporate Debtor against the Petitioner was withdrawn.

5. Sufficiency of Stamp Duty on the Loan Agreement:
The Corporate Debtor argued that the loan agreement was executed on insufficient stamp paper as per the Maharashtra Stamp Act, 1958. The Tribunal referred to Section 4 of the Maharashtra Stamp Act, which states that the principal instrument (the mortgage deed) was fully stamped, and the loan agreement required a duty of only ?100/-. Thus, there was no deficiency in stamp duty payment.

Conclusion:
The Tribunal found that the Petitioner had not received the outstanding debt from the Corporate Debtor and that the formalities under the Code were completed. The petition was admitted, and an Interim Resolution Professional (IRP) was appointed to conduct the Corporate Insolvency Resolution Process (CIRP). The Tribunal dismissed the IA challenging the maintainability and allowed the Company Petition, initiating CIRP against the Corporate Debtor. The commencement of the CIRP was effective from the date of the order.

 

 

 

 

Quick Updates:Latest Updates