Application Dismissed as Time-Barred: Limitation Act Prevails Over Partial Payments

The Tribunal dismissed the application under Section 7 of the Insolvency & Bankruptcy Code due to being time-barred under the Limitation Act, 1963. Despite partial payments made by the Corporate Debtor to the Financial Creditor, the application was found to have exceeded the limitation period, rendering it not maintainable. The Tribunal held that the subsequent payments did not extend the limitation period as per the Act, leading to the dismissal of the application solely on grounds of limitation.

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Issues:
- Application under Section 7 of the Insolvency & Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
- Default in delivering possession of a flat by the Corporate Debtor to the Financial Creditor.
- Compromise agreement between the Corporate Debtor and the Financial Creditor.
- Payment made by the Corporate Debtor to the Financial Creditor.
- Calculation of limitation period under the Limitation Act, 1963.

Analysis:
1. Application under Section 7 of the Insolvency & Bankruptcy Code: The petition was filed seeking initiation of Corporate Insolvency Resolution Process due to the Corporate Debtor's inability to liquidate financial debt. The Financial Creditor had made payments for a flat but possession was not delivered within the agreed timeline.

2. Default in delivering possession: The Corporate Debtor failed to hand over the flat within the stipulated time, leading to a compromise agreement in 2013 where the Corporate Debtor agreed to refund all payments made by the Financial Creditor. Despite partial payments, possession was not delivered as agreed.

3. Compromise agreement: A compromise deed was executed where the Corporate Debtor agreed to refund all amounts paid by the Financial Creditor and clear outstanding EMIs. However, the Corporate Debtor failed to honor the terms of the compromise agreement fully.

4. Payment made by the Corporate Debtor: The Corporate Debtor made partial payments to the Financial Creditor in 2013 and 2018, acknowledging the debt. The Financial Creditor argued that the application was filed within the limitation period based on these payments.

5. Calculation of limitation period: The Tribunal referred to Sections 18 and 19 of the Limitation Act, which require acknowledgment or payment of debt within the prescribed limitation period. The application was found to be filed beyond the limitation period, making it barred by limitation. The subsequent payment made by the Corporate Debtor did not extend the limitation period as per the Act.

6. Judgment: The Tribunal dismissed the application on the grounds of limitation, stating that since it was not maintainable due to being time-barred, there was no need to consider other grounds raised by the applicant. The dismissal was based on the application being filed after the expiration of the limitation period, as per the provisions of the Limitation Act, 1963.

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