2022 (5) TMI 391 - SCH - Insolvency and Bankruptcy

Supreme Court rules on time-barred insolvency application under Section 7

M/s. Invent Asset Securitisation And Reconstruction Pvt. Ltd. Versus M/s. Girnar Fibres Ltd.

M/s. Invent Asset Securitisation And Reconstruction Pvt. Ltd. Versus M/s. Girnar Fibres Ltd. - TMI Issues:1. Barred by limitation under Section 7 of the Insolvency and Bankruptcy Code, 2016.2. Lack of acknowledgment of liability in terms of Section 18 of the Limitation Act, 1963.3. Inability of documents towards restructuring of the loan and revival letter to benefit the appellant's application under Section 7 of the Code.4. Purpose of the Insolvency and Bankruptcy Code not being for money recovery proceedings.5. Dismissal of the appeal with observations on other proceedings by the appellant.The Supreme Court, comprising Hon'ble Mr. Justice Dinesh Maheshwari and Hon'ble Mr. Justice Aniruddha Bose, addressed the issue of limitation under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Court affirmed the decisions of the National Company Law Tribunal, Chandigarh Bench, and the National Company Law Appellate Tribunal, stating that the appellant's application was indeed time-barred. The Appellate Tribunal highlighted that the right to sue arose in 2002, and no acknowledgment of liability was evidenced under Section 18 of the Limitation Act, 1963.The Court analyzed the appellant's attempt to rely on documents related to loan restructuring and a revival letter. However, the Court concluded that these documents did not support the appellant's case under Section 7 of the Code. The Tribunal and the Appellate Tribunal's view was deemed plausible based on the facts and circumstances of the case, leading the Supreme Court to decline interference in their decision.Furthermore, the Court emphasized that the Insolvency and Bankruptcy Code aims to revive corporate debtors rather than being a tool for direct money recovery. The appellant's intention to use the Code for recovery purposes was not aligned with the Code's purpose, leading to the dismissal of the appeal. However, the Court noted that other proceedings initiated by the appellant should be independently handled based on their merits and in accordance with the law.In conclusion, the Supreme Court dismissed the appeal while providing guidance on the appellant's other proceedings. All pending applications were disposed of accordingly, maintaining the integrity of the legal process and upholding the principles of the Insolvency and Bankruptcy regime.