BIFR pendency excluded from limitation, and insolvency application admitted once default met the statutory threshold.

Pending BIFR proceedings under the Sick Industrial Companies Act, 1985 were excluded from limitation under section 22(5), so the insolvency application was treated as within time and not barred. The Tribunal further found that the debt and default crossed the minimum threshold under the Insolvency and Bankruptcy Code, 2016, accepted the proposed interim resolution professional, and admitted the application. Corporate insolvency resolution process was therefore initiated, with moratorium consequences under section 14 and the associated statutory duties triggered under the Code.

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Issues: (i) Whether the application was barred by limitation in view of the prior BIFR proceedings under the Sick Industrial Companies Act, 1985; (ii) Whether the requirements for admission of the insolvency application and commencement of corporate insolvency resolution process were satisfied.

Issue (i): Whether the application was barred by limitation in view of the prior BIFR proceedings under the Sick Industrial Companies Act, 1985.

Analysis: The corporate debtor had been before BIFR on an application under section 15(1) of the Sick Industrial Companies Act, 1985, and the matter remained pending until repeal of that enactment. In view of section 22(5) of the Sick Industrial Companies Act, 1985, the period during which the BIFR proceedings remained pending was excluded for limitation purposes. The Tribunal also noted that a settlement had earlier been worked out but was later withdrawn, and therefore the right to sue continued to subsist.

Conclusion: The application was held to be within limitation and not barred on that ground.

Issue (ii): Whether the requirements for admission of the insolvency application and commencement of corporate insolvency resolution process were satisfied.

Analysis: The Tribunal found that the debt and default exceeded the minimum threshold under the Insolvency and Bankruptcy Code, 2016. It further accepted the proposed interim resolution professional and directed initiation of the statutory insolvency process, including the moratorium under section 14 and performance of duties under sections 15, 17 and 18 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The insolvency application was admitted and corporate insolvency resolution process was initiated with moratorium and appointment of the interim resolution professional.

Final Conclusion: The petition succeeded, the corporate insolvency process was set in motion, and statutory moratorium consequences followed.

Ratio Decidendi: Where the debtor had been subject to valid BIFR proceedings, the excluded period is not counted for limitation, and if default otherwise satisfies the insolvency threshold, the application is admissible and CIRP may be commenced.

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