Tribunal allows debt claim, rejects limitation defense, admits CIRP application under IBC Section 14

The Tribunal found that the debt was not barred by limitation as the acknowledgment of debt by the respondent extended the limitation period. Additionally, the application was deemed maintainable despite a prior claim filed in the CIRP against the respondent's parent company, which had been validly withdrawn. Consequently, the Tribunal admitted the application, initiated the CIRP against the respondent, appointed an Interim Resolution Professional, and imposed a moratorium under Section 14 of the IBC.

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Issues Involved:
1. Whether the debt is barred by limitation.
2. Whether the present application is barred under the IBC due to a prior claim filed by the petitioner in the CIRP initiated against the parent company of the respondent.

Detailed Analysis:

Issue 1: Whether the debt is barred by limitation

The petitioner filed the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) against the respondent due to its inability to liquidate its financial debt. The respondent contended that the claim was time-barred under the Limitation Act, 1963, as the default occurred on 31.12.2015, and the application was filed on 04.03.2020, beyond the three-year limitation period prescribed by Article 137 of the Limitation Act.

However, the petitioner argued that the limitation period was extended under Section 18 of the Limitation Act due to an acknowledgment of debt by the respondent in a letter dated 18.07.2017. The letter explicitly acknowledged the debt for the purpose of Section 18 of the Limitation Act, which resets the limitation period from the date of acknowledgment. The Tribunal agreed with the petitioner, noting that the acknowledgment was made within three years from the date of NPA (31.12.2015), thus extending the limitation period. Consequently, the application filed on 04.03.2020 was within the extended limitation period.

Issue 2: Whether the present application is barred under the IBC due to a prior claim filed by the petitioner in the CIRP initiated against the parent company of the respondent

The respondent argued that the petitioner's application was not maintainable as it had previously filed a claim in the CIRP against the parent company of the respondent, Era Infra Engineering Limited (EIEL). The petitioner countered that it had withdrawn its claim from the CIRP of EIEL before filing the present application, and the RP had acknowledged this withdrawal via email dated 19.03.2020.

The Tribunal examined the provisions of the IBC and relevant regulations, noting that Section 12A of the IBC pertains to the withdrawal of applications admitted under Sections 7, 9, or 10 of the IBC and requires the approval of 90% of the CoC. However, this was not applicable to the withdrawal of claims filed by creditors. The Tribunal found that the petitioner's claim withdrawal was valid and acknowledged by the RP, and thus, there was no pending claim before the RP at the time of filing the present application.

The Tribunal also addressed the respondent's contention of forum shopping, referencing the decision in Dr. Vishnu Kumar Aggarwal v. M/s. Piramal Enterprises Ltd., which prohibits multiple claims for the same debt in different CIRPs. However, since the petitioner's claim in the CIRP of EIEL was withdrawn, this issue did not arise.

Conclusion:

The Tribunal concluded that the application was within the limitation period due to the acknowledgment of debt under Section 18 of the Limitation Act. It also held that the petitioner's application was maintainable despite the prior claim in the CIRP of EIEL, as the claim had been validly withdrawn. Consequently, the Tribunal admitted the application and initiated the CIRP against the respondent, appointing Mr. Anil Kohli as the Interim Resolution Professional (IRP). The moratorium under Section 14 of the IBC was also imposed, staying all proceedings against the corporate debtor and ensuring the continuation of essential services. The Financial Creditor was directed to deposit the fee for the IRP, and the IRP was instructed to follow the rules and regulations as per the IBC.

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