Tribunal Upholds Validity of Assignment Agreement, Dismisses Appeal

The Tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, finding it maintainable during the pendency of lender decisions. The application was not time-barred, as the right to apply accrued on the enforcement date. The claim of the Appellant was also not time-barred due to an assignment agreement with the Financial Creditor. The Tribunal upheld the validity of the assignment agreement, dismissing the appeal for lack of merit and granting no relief to the Appellants.

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Issues:
1. Maintainability of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 during the pendency of the decision of a Joint Lenders Forum or finalization of the corrective action plan.
2. Whether the claim of the applicant under Section 7 was barred by limitation.
3. Whether the claim of the Appellant was barred by limitation.
4. Validity of the assignment agreement and the rights of the Financial Creditor.

Issue 1 - Maintainability of the application under Section 7:
The Adjudicating Authority admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by the 1st Respondent against the Corporate Debtor. The Appellants (Shareholders/Directors) expressed readiness to settle the claim with the creditors. However, as no settlement was reached, the matter was heard, and the Appellants were given additional time to settle the matter. The Tribunal held that there was no bar to entertain an application under Section 7 during the pendency of a decision by a Joint Lenders Forum or finalization of a corrective action plan.

Issue 2 - Limitation of the application under Section 7:
The application under Section 7 was filed by the 1st Respondent on 1st December 2016. The Tribunal determined that the application was not barred by limitation under the Limitation Act, 1963, as the right to apply accrued to the 1st Respondent on the enforcement of the Insolvency and Bankruptcy Code on 1st December 2016.

Issue 3 - Limitation of the claim of the Appellant:
The claim of the Appellant was also examined for limitation. The Tribunal found that the claim was not barred by limitation as the immovable property of the Corporate Debtor was mortgaged in favor of the Financial Creditor, and the debt payable was assigned to the 1st Respondent by an assignment agreement. The Tribunal held that the claim of the 1st Respondent was not time-barred.

Issue 4 - Validity of the assignment agreement and rights of the Financial Creditor:
The Tribunal considered the assignment agreement where the debt owed by the Corporate Debtor was assigned to the 1st Respondent by IDFC Ltd. The Financial Creditor had the right to mortgage the immovable property and transfer the mortgage assets. The Tribunal determined that the claim of the 1st Respondent was valid and not barred by limitation.

In conclusion, the appeal was dismissed as it was found to be devoid of merit, and no relief was granted to the Appellants.

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