2018 (8) TMI 1927 - AT - IBC

Tribunal Dismisses Corporate Debtor's Appeal Over Insolvency Application, Upholds Limitation Period Compliance.

The Tribunal dismissed the appeal filed by the Corporate Debtor against the admission of an application under Section 9 of the Insolvency and Bankruptcy ... Maintainability of application - time limitation - the application is filed after more than three years, the cause of action having taken place on 9th May, 2012 - HELD THAT:- We are not inclined to decide the question whether there is a delay in preferring the application under Section 9 or not in view of the fact that the present appeal under Section 61 by the 'Corporate Debtor' is not maintainable as per the decision of the Hon'ble Supreme Court in Innoventive Industries Ltd. v. ICICI Bank [2017 (9) TMI 58 - SUPREME COURT]. Further, even if it is accepted that the Limitation Act, 1963 is applicable, in such case, Article 137 (Part II - 'other applications') will be applicable in terms of which period of three years' time prescribed is to be continued from the date of right to apply accrued to the Appellant - 'I&B Code' having come into force since 1st December, 2016, the Respondent accrued right to file application under Section 9 since 1st December, 2016 and the application having filed within three years, we hold that the application was within the period of limitation. Appeal dismissed - decided against appellant. Issues:- Appeal against admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016.- Time-barred application filed after more than three years.- Maintainability of the appeal under Section 61.- Application of the Limitation Act, 1963.- Applicability of Article 137 of the Limitation Act, 1963.- Applicability of Article 18 of the Limitation Act, 1963.Analysis:The appeal was filed by a Corporate Debtor against the order admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The main argument presented was that the application was time-barred as it was filed more than three years after the cause of action, which was claimed to have occurred on 9th May, 2012. The Respondent contended that the last payment was made in 2013, and correspondence regarding payment continued thereafter. However, the Tribunal did not delve into the question of delay as it found the appeal itself to be not maintainable under Section 61 due to a Supreme Court decision in Innoventive Industries Ltd. v. ICICI Bank 143 SCL 625.Regarding the application of the Limitation Act, 1963, the Tribunal noted that even if the Act was applicable, Article 137 (Part II - 'other applications') would govern the case, prescribing a three-year time limit from the date the right to apply accrued to the Appellant. Since the Insolvency and Bankruptcy Code came into force on 1st December, 2016, the right to file the application under Section 9 accrued from that date, and the application was found to be within the limitation period.The Senior Counsel for the Appellant argued that Article 18 of the Limitation Act, 1963 should apply as the matter pertained to the 'price of work done by the plaintiff for the defendant.' However, the Tribunal ruled that Article 18, being in Part 1 of the Limitation Act, 1963, was not applicable in this case, which was not a 'suit' or a 'recovery proceeding' under the Insolvency and Bankruptcy Code.Ultimately, the Tribunal dismissed the appeal on grounds of maintainability and merit, finding that no case had been made out for interference with the impugned order dated 9th June, 2018. The appeal was accordingly dismissed with no costs awarded.