2019 (4) TMI 2032 - AT - Insolvency and Bankruptcy

Debt Recovery Application Allowed Despite Time Limit Issue

B.S.E. Ltd. Versus Neo Corp International Ltd.

B.S.E. Ltd. Versus Neo Corp International Ltd. - TMI Issues: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 rejected on the ground of limitation.Analysis:1. The Appellant, 'Bombay Stock Exchange Limited,' filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against 'Neo Corp International Ltd.' The National Company Law Tribunal rejected the application on the basis that the Corporate Debtor defaulted in payment of Rs. 5,37,939 towards annual listing fee as of April 1, 2014, and deemed the application barred by limitation.2. The Appellant argued that the operational debt of Rs. 5,57,959 was due since April 1, 2014, as per Form-5 filed under the I & B Code.3. The Tribunal noted that invoices were issued on April 1, 2017, showing the total amount payable, including service tax for the year 2017-18. It found that the Adjudicating Authority failed to consider the documents attached with Form-5, leading to an incorrect conclusion that the application was time-barred.4. The Tribunal acknowledged the applicability of the Limitation Act, 1963, under Section 238A of the I & B Code. It clarified that Part II of the Schedule of the Limitation Act applies to applications under Section 9.5. Since the right to apply accrued on April 1, 2017, the Tribunal held that the application under Section 9 was not time-barred.6. The Tribunal explained that if a claim is barred by limitation under Part I of the Schedule of the Limitation Act, a person can argue that 'there is no debt payable in law.' In this case, since the invoice amount exceeded Rs. 1 lakh and would not be time-barred if a suit were filed, the Corporate Debtor could not claim the amount was time-barred.7. Despite issuing notice to the Corporate Debtor and directing publication in newspapers for the hearing, the Corporate Debtor failed to appear or raise any objections. The Tribunal opined that the application under Section 9 was complete, and the Adjudicating Authority should have admitted it instead of rejecting it based on limitation.8. Consequently, the Tribunal set aside the impugned order and remitted the matter to the Adjudicating Authority to admit the application under Section 9. If the Corporate Debtor fails to appear despite notice, the Adjudicating Authority is directed to initiate the Corporate Insolvency Resolution Process immediately. The appeal was allowed with the mentioned observations and directions, without costs.