9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 1210 - AT - Insolvency and BankruptcyInitiation of CIRP - Period of limitation - Article 137 of the Limitation Act, 1963 - NCLT rejected the application - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - It is well settled that the Limitation Act is applicable in IBC Proceedings and IBC does not exclude the application of Sections 6 to 14 or 18 and any provision of the Limitation Act - The question to be considered in the present case is as to whether Appellant can take benefit of Article 1 of the Limitation Act, 1963. Hon ble Supreme Court in the matter of B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES 2018 (10) TMI 777 - SUPREME COURT after considering the provisions of IBC and the Limitation Act had laid down that for filing application under Section 7 and 9, it is Article 137 which is attracted. In the present case, the Appellant has placed reliance on Article 1 of the Limitation Act which we have extracted above. A similar provision akin to Article 1 of the Limitation Act came for consideration before the Hon ble Supreme Court in Hindustan Forest Company case. Article 1 is in Part-I of the Schedule of the Limitation Act dealing with suits, under the suit relating to accounts . The Application filed under Section 9 by the Appellant cannot be said to be a suit relating to accounts. The Ledger of Operational Creditor has been brought on record including the Bank Statement which clearly mentions that last payment received by the Appellant was on 26th September, 2016. From the last payment, the Application could have been filed within three years. Application under Section 9 filed by the Appellant was on the basis of 174 invoices as has been noticed by the Adjudicating Authority in the Impugned Order. We are satisfied that for the limitation for filing Section 9 application it is Article 137 of the Limitation Act, 1963 which is attracted. Under Article 137, time from which period begins to run is when the right to apply accrues the right to apply accrues when invoices issued by the Appellant to the Corporate Debtor were not paid. Invoices on the basis of which payment is claimed are more than three years earlier from the date of filing of Section 9 Application which is the basis for rejection of the Application of the Appellant by the Adjudicating Authority. Appeal dismissed.
Issues:
1. Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 rejected as barred by time. 2. Interpretation of the Limitation Act, 1963 in relation to the filing of Section 9 Application. 3. Applicability of Article 1 of the Limitation Act to the present case. 4. Determination of the correct limitation period for filing a Section 9 Application. Issue 1: The Appellant filed an Application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking Corporate Insolvency Resolution Process of the Corporate Debtor. The Adjudicating Authority rejected the Application as barred by time due to the invoices being more than three years old from the date of filing the Section 9 Application. Analysis: The Adjudicating Authority's decision was based on the fact that the invoices forming the basis of the Section 9 Application dated back to 2015-16, with the last invoices being dated 29.09.2016 and 10.10.2016, which were beyond the three-year limitation period. As a result, the Application was deemed time-barred. Issue 2: The interpretation of the Limitation Act, 1963 was crucial in determining the limitation period for filing a Section 9 Application under the Insolvency and Bankruptcy Code, 2016. Analysis: The Appellant argued that Article 1 of the Limitation Act should apply, which provides a limitation period of three years from the close of the year in which the last item admitted or proved is entered in the account. However, the Respondent contended that Article 137 of the Limitation Act, which deals with the right to apply accruing when a default occurs, should be the applicable provision for Section 9 Applications. Issue 3: The question of whether Article 1 of the Limitation Act, 1963 is applicable to the present case was a key point of contention between the parties. Analysis: The Appellant sought to rely on Article 1 of the Limitation Act, claiming that mutual dealings between the parties should trigger this provision. However, the Respondent argued that Article 137 of the Limitation Act, which governs the filing of applications under the Insolvency and Bankruptcy Code, should prevail over Article 1 in this context. Issue 4: Determining the correct limitation period for filing a Section 9 Application was essential in deciding the fate of the Appeal. Analysis: The Tribunal analyzed various judgments, including those of the Hon'ble Supreme Court, to ascertain that Article 137 of the Limitation Act is applicable to Section 9 Applications. The right to apply under the Code accrues when a default occurs, and in this case, the invoices forming the basis of the claim were over three years old. Therefore, the Adjudicating Authority's rejection of the Application was upheld based on the correct interpretation of the Limitation Act. In conclusion, the National Company Law Appellate Tribunal dismissed the Appeal against the rejection of the Section 9 Application, emphasizing the application of Article 137 of the Limitation Act for such cases and ruling that the invoices forming the claim were time-barred. The judgment highlighted the importance of correctly interpreting the Limitation Act in insolvency proceedings to ensure the timely filing of applications within the prescribed limitation period.
|
