Dismissal of Insolvency Application against M/s Bhawan Das Auto Finance Ltd. as Time-Barred

The National Company Law Tribunal, Kolkata Bench, dismissed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by 'HDFC Bank Ltd.' against 'M/s Bhawan Das Auto Finance Ltd.' as time-barred. The Tribunal found that the application, seeking to rely on an Arbitral Award, was not maintainable due to the absence of default. Despite acknowledging a delay in filing the appeal, the Tribunal held that the application was barred by limitation, leading to the dismissal of the appeal.

---

---

Issues: Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 dismissed as barred by limitation.

The judgment involves a case where 'HDFC Bank Ltd.' filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against 'M/s Bhawan Das Auto Finance Ltd.' The National Company Law Tribunal, Kolkata Bench, dismissed the application as being time-barred. The account of the Corporate Debtor was declared a Non-Performing Asset (NPA) by the Bank in 2010, making the application under Section 7 barred by limitation from the date of NPA declaration.

The Appellant Bank relied on an Arbitral Award issued in its favor against the Corporate Debtor for a specific sum with interest. The Tribunal noted that there were two Arbitral Awards, one in 2014 and another in 2017, awarding a substantial amount along with interest. The Tribunal held that if the Bank intended to rely on the award, there was no default, and thus, the application under Section 7 was not maintainable.

The Tribunal observed that the Bank's application seemed to be for the execution of the Arbitral Award. Referring to Section 65 of the Insolvency and Bankruptcy Code, the Tribunal highlighted provisions related to fraudulent or malicious initiation of proceedings, imposing penalties for such actions. While the Tribunal refrained from finding malicious intent on the Bank's part, it concluded that the application under Section 7 was time-barred, not warranting further consideration.

Consequently, the Tribunal, while acknowledging a delay in filing the appeal, dismissed the appeal on merit, holding that the application under Section 7 was barred by limitation. The Interlocutory Application was disposed of accordingly, based on the detailed analysis of the issues surrounding the application under Section 7 of the Insolvency and Bankruptcy Code.

---