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2021 (7) TMI 668 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to pay the defaulted payment of installment - account declared as Non-Performing Asset - the Respondent Bank has mentioned the date of default as 07.06.2016, whereas, under Section 7 an Application was filed by Respondent Bank on 06.06.2019 - time limitation - HELD THAT - An application under Section 7 of the IBC was filed by Respondent No. 1/ Financial Creditor, namely, the Bank of India on 04.06.2019. Further, from the perusal of the application Part-4 Volume-I of the Appeal Paper Book marked at Page-38 the date of default is mentioned as 07.06.2016 - The Appellant in the Reply Affidavit filed before the Adjudicating Authority Para 4 at Page- 65 of the Appeal Paper Book, Volume- I has already stated that 07.06.2016 is the date when the account of the Appellant was declared NPA. And in Para-9 of the Reply Affidavit marked at Page- 67 of the Appeal Paper Book, they have admitted that the installment of month of January, 2019 remain unpaid so the default date started on 30.01.2016. There is a clear acknowledgment on behalf of two Directors one who have died subsequently. There is no illegality in the Impugned Judgement passed by the Adjudicating Authority and Impugned Judgement is hereby affirmed - there is no merit in this Appeal - Appeal dismissed.
Issues Involved:
1. Admissibility of the Section 7 Application under the Insolvency and Bankruptcy Code (IBC). 2. Limitation period for filing the application. 3. Acknowledgment of debt and its validity. 4. Allegations of forgery regarding the acknowledgment of debt. 5. Moratorium under Section 14 of the IBC. Detailed Analysis: 1. Admissibility of the Section 7 Application: The appeal was filed by the Corporate Debtor against the order dated 18.12.2020 by the National Company Law Tribunal (NCLT), Ahmedabad Bench, which admitted an application under Section 7 of the IBC filed by the Financial Creditor. The NCLT declared a moratorium prohibiting various actions against the Corporate Debtor and appointed an Interim Resolution Professional (IRP). 2. Limitation Period for Filing the Application: The Appellant argued that the application under Section 7 was barred by limitation, stating that the date of default should be considered as 28.01.2016, not the date of NPA declaration (07.06.2016). The Respondent countered that the application was filed within the prescribed limitation period of three years as per Article 137 of the Limitation Act, 1963, since the date of default is the date of NPA. 3. Acknowledgment of Debt and Its Validity: The Appellant contested the acknowledgment of debt dated 19.11.2018, claiming it was not filed with the main application and was discovered later. The Respondent argued that the acknowledgment was valid and extended the limitation period under Section 18 of the Limitation Act. 4. Allegations of Forgery Regarding the Acknowledgment of Debt: The Appellant alleged forgery in the acknowledgment of debt and lodged a police complaint upon discovering the document. The Respondent dismissed this as an afterthought, arguing that the complaint was filed only after the document was produced before the Adjudicating Authority. 5. Moratorium Under Section 14 of the IBC: The NCLT declared a moratorium prohibiting the institution or continuation of suits against the Corporate Debtor, transferring or disposing of assets, and recovering property occupied by the Corporate Debtor. The supply of essential goods and services was mandated to continue during the moratorium period. Findings: The Tribunal found that the application under Section 7 was filed within the limitation period, as the date of default was correctly considered as 07.06.2016, the date of NPA. The acknowledgment of debt dated 19.11.2018, signed by two directors, was deemed valid, and the allegations of forgery were dismissed as unsubstantiated. The Tribunal affirmed the NCLT's order, finding no illegality or reason to interfere with the Adjudicating Authority's findings. Conclusion: The appeal was dismissed without costs, and the period spent during the pendency of the appeal was excluded from the Corporate Insolvency Resolution Process (CIRP) period. The Registry was directed to upload the judgment on the Appellate Tribunal's website and send a copy to the NCLT, Ahmedabad Bench.
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