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TMI Blog2017 (11) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... quivalent to Courts as long as Tribunals have trappings of courts, likewise when an order is passed giving finality to a controversy, it is as good as decree, therefore any proceeding given finality to a controversy, such judicial proceeding can be like any other suit proceeding, in any event application being included in section 3 of Limitation Act, this petition under IB code shall be construed as suit or application, as the case may be, under Limitation Act. There is a situation where Limitation Act could not reach, that is Constitution, there whenever any writ either under Article 226 or on fundamental rights is filed, since constitution governs every other statute, the Limitation Act will remain applicable to other statutes, for this reason only, delay and laches doctrine has been carved out to meet the situation in constitutional matters. Thus in whatever line so far limitation is applied to winding up cases, in the same line, prescription of limitation is applicable to the Code as well. As long as limitation is not prescribed under any specific enactment, it goes without saying Limitation Act, 1963 is automatically applicable to the Code as well. Company Petition is di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent is barred by limitation, as the Debentures were matured between the year 2011-2013 is not based on law. There is nothing on the record that Limitation Act, 2013 is applicable to I B Code. Learned Counsel for the appellant also failed to lay hand on any of the provision of I B Code to suggest that the Limitation Act, 1963 is applicable. I B Code, 2016 is not an Act for recovery of money claim, it relates to initiation of Corporate Insolvency Resolution Process. If there is a debt which includes interest and there is default of debt and having continuous course of action, the argument that the claim of money by respondent is barred by Limitation cannot be accepted . 5. On reading this para dealt with Limitation aspect by Hon ble NCLAT, it appears to us that Hon ble NCLAT said that Code has nowhere envisaged that Limitations Act is applicable to I B Code, it is true, as Honourable NCLAT said, it is nowhere said in I B Code that Limitation Act is applicable to it, but it is also nowhere said in the Code that Limitation Act is not applicable to it. Perhaps for that reason only, Honourable Appellate Tribunal, in the last sentence of the same para, held If there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such application cannot be peeled out from any legislation unless it is said as not applicable. Application of Limitation Act has to be viewed as constructive application to uphold the sanctity of this Code as well as general jurisprudence emanating from various enactments in existence. 10. By reading all the sentences of the para quoted in tandem, it appears that Hon ble NCLAT categorically held that since it is a continuous course of action, the argument of the Appellant saying debt is barred by Limitation cannot be accepted, therefore, ratio decided by Hon ble NCLAT cannot be stretched out to say that Limitation Act is not applicable to the Code. If limitation is not mentioned as applicable, it does not mean that courts get a right to set out prescription of limitation period on its own. 11. If we come to the Code, we see many words that normally come in money recovery suits, that is debt, dispute, default, creditor, debtor, etc., most of which do not appear in Companies Act, and issues involved in the Code also revolve around claim of creditors. 12. In Section-6 of the Code, jurisdiction arises to the parties to initiate proceedings come from existence of debt and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en u/s 8, the composite claim has to be construed as within limitation, but such assumption cannot make a defective claim as enforceable debt. 16. Even in winding up cases under Companies Act 1956, it has been held that time barred debt would not be considered as claim for filing winding up Petitions. It is a fact that one should not forget that in Companies Act, 1956 it has not been said anywhere Limitation Act is applicable to it, still Limitation Act has been applied to Companies Act 1956 for more than century. Since it has become settled proposition that Limitation Act is applicable to Companies Act 1956, with all humility, we hereby hold that same analogy is applicable to this Code. Relief in winding up petition is also not meant for recovery of money. Henceforth that defective invoice i.e. time barred by Limitation being included in the claim, the claim that was not defective by the time notice given u/s 8 has become defective as on the date of filing case u/s 9 of the Code. 17. If we navigate through many of the major and fundamental laws applicability of Limitation Act 1963 or 1908 Act has not been mentioned not only in Companies Act 1956, but also in various Acts, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o start from the day Code has come into force. Assuming limitation period started running from the date code has come into force, what happens - time barred debts will also get life for recovery. 21. What will ultimately happen in Insolvency Petition? Answer is distribution of assets to pay to the creditors, whether it is in the form of money suit or in the form insolvency, logical end is payment to the creditors by liquidation. It is like one shot, two birds - creditors and other stakeholders will get solution to their dues and maximization of value of the assets of corporate persons will happen in time-bound manner instead of allowing death of company after everything has been sucked into. 22. If limitation is said as not applicable or giving life to time barred debts under the cover of Insolvency and Bankruptcy Code, it will be nothing but opening the lid of uncertainty giving a big hand to the persons not diligent of their rights. If this is the case, tomorrow a person forgets of his remedy many years before will come saying company is to be liquidated basing on a time barred debt. Moreover, so far it is a legitimate expectation of everybody - creditors as well as debtors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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