The Tribunal examined the maintainability of an application for initiating the Corporate Insolvency Resolution Process (CIRP) u/s 7 of the Insolvency and Bankruptcy Code (IBC). It addressed the issue of condonation of delay in filing the petition. The Operational Creditor (OC) claimed a bona fide belief that the petition was filed within the limitation period. However, the Tribunal held that Section 5 of the IBC applies to applications filed u/ss 7 or 9, and cited the Supreme Court's decision in B.K Educational Services Pvt. Ltd. Vs. Parag Gupta And Associates, which stated that the right to sue accrues when a default occurs, and if the default occurred over three years prior to the application filing, it would be barred under Article 137 of the Limitation Act, except in cases where Section 5 may be applied to condone the delay. The Tribunal rejected the OC's plea of bona fide belief and held that the mandatory provision must be complied with, and the delay must be sufficiently and convincingly explained for condonation. Finding no merit in the appeal, the NCLAT dismissed it.
The Tribunal examined the maintainability of an application for initiating the Corporate Insolvency Resolution Process (CIRP) u/s 7 of the Insolvency and Bankruptcy Code (IBC). It addressed the issue of condonation of delay in filing the petition. The Operational Creditor (OC) claimed a bona fide belief that the petition was filed within the limitation period. However, the Tribunal held that Section 5 of the IBC applies to applications filed u/ss 7 or 9, and cited the Supreme Court's decision in B.K Educational Services Pvt. Ltd. Vs. Parag Gupta And Associates, which stated that the right to sue accrues when a default occurs, and if the default occurred over three years prior to the application filing, it would be barred under Article 137 of the Limitation Act, except in cases where Section 5 may be applied to condone the delay. The Tribunal rejected the OC's plea of bona fide belief and held that the mandatory provision must be complied with, and the delay must be sufficiently and convincingly explained for condonation. Finding no merit in the appeal, the NCLAT dismissed it.
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
TaxTMI 
of 4828 
Join Channel 
