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TMI Blog2020 (2) TMI 1474X X X X Extracts X X X X X X X X Extracts X X X X ..... n, therefore, the application is liable to be rejected - appeal dismissed. - Company Appeal (AT) (Insolvency) No. 797 of 2019 - - - Dated:- 17-2-2020 - JARAT KUMAR JAIN J. (Judicial Member), BALVINDER SINGH and DR. ASHOK KUMAR MISHRA Technical Members For Appellant:- Mr. Chandra Shekhar Yadav, Advocate for Appellant. For Respondent:- Mr. Dhruv Tamta, Advocate for Respondent. JUDGEMENT This Appeal has been preferred by Meena V. Kothari (Financial Creditors) against the Order dated 29.03.2019 passed by Adjudicating Authority (National Company Law Tribunal) Mumbai, Bench Mumbai. 2. By the impugned order, the Adjudicating Authority rejected the Application under Section 7 of the Insolvency Bankruptcy Code, 2016 (In Short I B Code) preferred by Meena V Kothari. 3. Brief facts of this case are that on 12.08.2002 the Appellant (Financial Creditor) advanced a loan of ₹ 10 Laks to Respondent (Corporate Debtor) as a temporary financial assistance. The loan was to be repaid with the interest at the rate of 18% per annum as soon as financial crisis is over within reasonable time i.e., 6 months to 12 months. The Corporate Debtor acknowledged the debt vide ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ati Jewellers Ors.) decided on 01.10.2019 held that merely because suit has been filed by the Financial Creditor and pending, cannot be ground to reject the application under Section 7 of the I B Code. 6. Learned Counsel for the Appellant further submits that the Hon ble Supreme Court in the case of Innovative Industries Ltd. Vs. ICICI Bank Anr. (2018) 1 SCC 407 held that claim mean a right to payment even if it is disputed. In the present case, it is admitted fact that the Financial Creditor advanced a loan of ₹ 10 Lakh at the interest of 18% per annum and the loan has not been repaid to the Financial Creditor in such circumstances, the order passed by the Adjudicating Authority is liable to be set aside. 7. On the other hand, learned counsel for the Respondent supports the impugned order and submits that as per the Section 238-A of I B Code the provision of Limitation Act, 1963 shall apply to the proceedings before the Adjudicating Authority. The last balance confirmation is on 01.04.2007 by the Corporate Debtor therefore, the application ought to be filed within 3 years from 01.04.2007 i.e., till 31.03.2010. However, the Application has been filed on 17.04.18 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art I, particulars of the corporate debtor in Part II, particulars of the proposedinterim resolution professional in Part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default form the records of the information utility or on the basis of the of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Vs. Parag Gupta and Associates: [2018 SCC ONLINE 1921] It is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. The right to sue , therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, section 5 of the Limitation act may be applied to condone the delay in filing such application. 12. In this Case the right to sue accrues when a default occurred i.e. 25.11.2007. The Financial Creditor has filed the application under Section 7 of I B Code, on 17.04.2018, i.e. after 3 years from the date of default apparently the application is time barred. 13. The Adjudicating Authority rejected the application on the ground that after final decision of Civil suit, the debt become due; this tribunal in the case of Karan Goyal (Supra) held as under: from the aforesaid finding of the Hon ble Supreme Court, it is clear that once ..... X X X X Extracts X X X X X X X X Extracts X X X X
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