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2022 (9) TMI 1068 - AT - Insolvency and BankruptcySeeking release of Corporate Debtor from the rigor of Corporate Insolvency Resolution Process - non-payment of installment and interest the loan accounts, categorized as NPA - Section 13(2) of the SARFAESI Act, 2002 - HELD THAT - The amount reflected in the Balance Sheet as on 31.03.2018 at page no. 357 of the Affidavit in Reply reflects Principal amount of Rs. 30,11,22,262/- and interest outstanding Rs. 388,47,984/- the details of security are also reflected therein. In Note-VII interest accrued and due on borrowings of these non- convertible debentures is reflected in other current liabilities at Rs. 50,57,75,337/-. All these reflects that there is a large amount due as far as the job of reconciliation is concerned the code goes by the filing of claim and its scrutiny in accordance with the Code and related Regulation to be verified in primarily by the Interim Resolution Professional/Resolution Professional followed by the scrutiny and approval by Committee of Creditors and its acceptance by the Adjudicating Authority. There is no iota of doubt that the debentures being a long term borrowing a debt under Section 5 (8) - it is very much clear that the debt is due and payable in law and the amount is exceeding the basic threshold of the Code and hence, we are in agreement with the order of Adjudicating Authority and accordingly, the order of Adjudicating Authority is upheld. The Appeal is accordingly dismissed.
Issues Involved:
1. Whether the insolvency petition filed by the Respondent No. 1 (SASF) against the Corporate Debtor is time-barred. 2. Whether the insolvency petition was filed by SASF without the requisite authority. Issue-wise Detailed Analysis: 1. Time-Barred Petition: The Appellant contended that the insolvency petition filed by SASF is time-barred. The primary argument was that the date of default is fixed and sacrosanct in insolvency proceedings, and the petition was filed beyond the three-year limitation period prescribed under Article 137 of the Limitation Act, 1963. The Appellant cited several judgments to support this claim, including "B.K. Educational Services Pvt. Ltd. vs. Parag Gupta and Associates" and "Sagar Sharma vs. Phoenix ARC Pvt. Ltd." The Respondent countered by presenting a timeline of acknowledgments and actions that extended the limitation period. Key dates included: - 19.03.2005: Corporate Debtor acknowledged outstanding dues in an OTS proposal. - 26.02.2007: Corporate Debtor filed a reference under SICA, acknowledging its dues. - 26.08.2008: Corporate Debtor acknowledged its obligations in response to a statutory notice under SARFAESI Act. - Annual Balance Sheets (ABS): From 2006 to 2018, the Corporate Debtor acknowledged its debt in its ABS. The Adjudicating Authority concluded that these acknowledgments extended the limitation period, making the petition filed on 10.01.2019 within the permissible period. The period during which the proceedings were pending before the BIFR was excluded from the limitation period. 2. Requisite Authority: The Appellant argued that SASF, being a trust under the Indian Trust Act, 1882, did not have the authority to initiate insolvency proceedings. The Respondent refuted this by stating that SASF acquired the debt from IDBI through a registered transfer deed, which included all rights, titles, and interests. This transfer granted SASF the authority to initiate CIRP. The Adjudicating Authority upheld this view, stating that SASF, as the assignee of the debt, had all the rights and authorities to realize the debt through legal processes, including initiating CIRP. Conclusion: The Tribunal upheld the Adjudicating Authority's order, confirming that: - The insolvency petition was not time-barred due to multiple acknowledgments of debt by the Corporate Debtor, extending the limitation period. - SASF had the requisite authority to initiate insolvency proceedings as the assignee of the debt from IDBI. The appeal was dismissed, and the order of the Adjudicating Authority was upheld. The interim order, if any, stood vacated.
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