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TMI Blog2022 (11) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... oming to the conclusion that application is not barred by time - the Adjudicating Authority was obliged to consider the question of limitation of the application under Section 7 filed by the Financial Creditor and without adverting to the said issue application ought not have been admitted. Insofar as submission of learned counsel for the Appellant that application under Section 7 having been filed for recovery of additional interest ought not have been entertained. In view of the fact that matter is being sent back to the Adjudicating Authority for considering the question of limitation, the above submission of the Appellant may also be considered by the Adjudicating Authority - one opportunity be also provided to the Appellant/Corporate Debtor to file a reply to Section 7 application. Appeal is allowed. - Company Appeal ( AT ) ( Insolvency ) No. 868 of 2022 - - - Dated:- 23-11-2022 - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Pallav Saxena, Mr. Sorabh Dahiya and Mr. Nauseen Samar, Advocates For the Respondents : Ms. Pooja Mahajan and Ms. Mehak Nayak, Advocates JUDGMENT ASHOK BHUSHAN , J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Interim Resolution Professional (IRP) and declared moratorium. Aggrieved by the order dated 24.05.2022, this Appeal has been filed. 2. Learned counsel for Appellant challenging the order impugned submits that application under Section 7 filed by the Financial Creditor on 31.12.2019 was clearly barred by time. No date of declaration of account of Corporate Debtor as NPA has been given in the application under Section 7. According to the Application under Section 7, default of payment of instalment on due date begin from September, 2012. Section 7 application was filed even after three years from the issue of notice to the Corporate Debtor on 19.05.2016, 06.06.2016 and 12.09.2016. The Adjudicating Authority without adverting to the question as to whether the application filed by the Financial Creditor was within time, proceeded to admit the application. Even if proceedings were ex-parte to the Corporate Debtor, the Adjudicating Authority ought to have considered as to whether application is within time. It is further submitted that from the details given in Part IV of the Section 7 application it is clear that there is no outstanding due towards the principal amount and appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 6. Section 3 of the Limitation Act puts an embargo on every suit, appeal and application if have been found to be barred by limitation. Section 3 is imperative and cast a duty on the Adjudicating Authority to look into limitation even if limitation is not set up as a defence, which is a well settled principle of law. The present is a case where the Corporate Debtor did not appear or raised any objection to the application, however, the Adjudicating Authority was required to look into at least the averments in the Section 7 application to find out as to whether application under Section 7 is filed within period of limitation or not. Limitation for filing application under Section 7 is three years as provided in Article 137 of the Limitation Act. Part IV of the Application contains particulars of financial debt. In the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 , an application under Section 7 has to be filed in Form-I. Part IV of the application Item No.2 provides amount claimed to be in default and the date on which the default occurred (The computation of amount and days of default in tabular form was attached). When we look into applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d final settlement is made on basis of which extension of limitation under Section 18 is claimed. From 11.11.2016 also, if there will be extension of limitation for 3 years, it will come to an end on 10.11.2019. The application under Section 7 has admittedly been filed on 31.12.2019 beyond three years from the demand notice dated 19.05.2016, 06.06.2016 and 12.09.2016 as claimed in the application. As per notices issued by the Financial Creditor to the Corporate Debtor dated 19.05.2016 default of amount of Rs.2,22,94,220/- was claimed which was required to be cleared within four days. It is useful to extract one of the notices dated 19.05.2016 which is to the following effect: To, 1. M/s Simmtronics Semiconductors Limited, C-41 Okhla Industrial Area Phase-I New Delhi Dl 110020 Kind Attn: Mr. Indrajit Sabharwal Dear Sir, Sub: To clear the outstanding dues in Term Loan account Nos.3240439, 3249715, 3257103 and 3375444; This is to be bring to your notice that as on 17th May, 2016 an amount of Rs.2,22,94,220/- (Rupees Two Crores Twenty Two Lakhs Ninety Four Thousand Two Hundred and twenty only) is due and payable by you to us in captioned L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IV or Part V to indicate that how the application is filed within time, it was incumbent upon the Adjudicating Authority to examine the question whether the application under Section 7 is within limitation or not. The mere fact that Corporate Debtor did not appear or filed any objection, was not relevant for consideration of question of limitation by the Adjudicating Authority. The submission which has now been advanced before us in this Appeal by learned counsel for Respondent is that Applicant is entitled for benefit of Section 5 and Section 14 of the Limitation Act for coming to the conclusion that application is not barred by time. For claiming benefit under Section 5 and 14 of the Limitation Act facts and sequence of the events have to be placed before the Court to consider the question as to whether the Applicant was entitled for benefit under Section 5 or Section 14 or not. The extension of benefit of Section 14 or Section 5 is dependent on scrutiny of the relevant facts and sequence of events which will required to be examined before returning the finding. In view of the foregoing discussion, we are satisfied that the Adjudicating Authority was obliged to consider the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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