2021 (3) TMI 1337 - Tri - Insolvency and Bankruptcy

Petition for Insolvency Process Rejected as Time-Barred

N.R. Polytechnic College Versus Mars Remedies Pvt. Ltd.

The Tribunal rejected the petition to initiate corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code as it was ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The application is filed by Shri. Vishal Jitendra Patel, Director of the Petitioner Company with authorization papers. As per Section 7 of IBC, for an application preferred by the Financial Creditor for initiation of Corporate Insolvency Resolution Process, the Adjudicating Authority is required to see the existence of financial debt and ascertain the existence of default. As per the documents submitted by the Petitioner that there is a financial debt in the form of loans availed by the Corporate Debtor. The date of default is on 29.09.2015. The last date of payment by the Corporate Debtor is on 29.09.2015 and thereafter no payment was made. The last entry in 26AS of the Income Tax Statement for payment of interest is on 31.03.2016. The application is Educational Society held that Limitation Act is applicable to the proceedings under IBC. The petition is not maintainable as time barred. As a consequence, the instant petition is rejected in terms of Section 7 of the IB Code - Petition dismissed. Issues:Initiation of corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016 based on default in loan repayment.Analysis:The Petitioner, a Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, seeking to initiate the corporate insolvency resolution process against the Respondent, a company, for defaulting on a loan. The Petitioner claimed that the Respondent had defaulted on an unsecured loan amounting to &8377; 89,24,630, including principal and interest, with the default date being 29.09.2015. The Petitioner provided detailed documentation, including disbursement records, calculation sheets, financial statements, demand notices, and communication exchanges, to support the claim.The Respondent contested the claim, arguing that the Petitioner was not involved in money lending and that the alleged claim was beyond the period of limitation as the last payment was made on 29.09.2015. The Respondent denied the default amount and objected to the maintainability of the claim by the Petitioner as a financial creditor. The Respondent highlighted that the alleged claim was time-barred as per the limitation laws.After hearing both parties and reviewing the documents submitted, the Tribunal found that the application for initiating the corporate insolvency resolution process was time-barred. The Tribunal noted that the date of default was 29.09.2015, and no payment had been made thereafter. The Tribunal also considered the Limitation Act's applicability to proceedings under the Insolvency and Bankruptcy Code. Consequently, the petition was rejected under Section 7 of the IB Code due to being time-barred, and no costs were awarded. The Registry was directed to communicate the order to both parties, and the petition was disposed of accordingly.