TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 498
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.... 'Bank of Baroda')- ('Financial Creditor') under Section 7 of the 'I&B Code' came to be admitted with consequential orders in the nature of slapping of Moratorium on the assets of the 'Corporate Debtor' and appointment of 'Interim Resolution Professional'. The challenge to impugned order is limited to issue of limitation, it being raised as a ground in appeal that the financial debt in respect whereof the 'Financial Creditor' sought triggering of 'Corporate Insolvency Resolution Process' was not payable in law, same being barred by limitation. 2. Learned counsel for the Appellant submitted that in the instant case the admitted date of the default of the financial debt is 1st May, 2000 which is the date on which such debt was declared as NPA and in view of the same, such debt could be claimed by the 'Financial Creditor' within three years from such date. It is further submitted that any subsequent acknowledgment would not change the date of default which remains static. It is further submitted that the 'Corporate Insolvency Resolution Process not being a recovery proceeding, triggering thereof is permissible within the limitation commencing from the date of default and not the date....
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....'Financial Creditor'. 4. Heard learned counsel for the parties and perused the record. 5. The factual matrix of the case has not been adumbrated in detail as the only issue arising for consideration revolves around the point of limitation. It is well settled by now that the provisions of the Limitation Act, 1963 are applicable to applications relating to triggering of 'Corporate Insolvency Resolution Process' under 'I&B Code' and Article 137 of the Limitation Act, 1963 prescribing a period of three years applies to such applications. In "Vashdeo R. Bhojwani vs. Abhyudaya Co-operative Bank Limited and another - (2019) 9 SCC 158", the Hon'ble Apex Court referring to its Judgment rendered in "B.K. Educational Services Private Limited vs. Parag Gupta and Associates - (2018) SCC Online SC 1921" held: "3. Having heard the learned counsel for both parties, we are of the view that this is a case covered by our recent judgment in B.K. Educational Services (P) Ltd. v. Parag Gupta and Associates, para 42 of which reads as follows: "42. It is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Ar....
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....s statutorily to be annexed to the Section 7 application in Column II which was the date on which default occurred, the date of the NPA i.e. 21-7-2011 was filled up. The NCLT applied Article 62 of the Limitation Act which reads as follows: "Description of suit Period of limitation Time from which period begins to run 62. To enforce payment of money secured by a mortgage or otherwise charged upon immovable property Twelve years When the money sued for becomes due." Applying the aforesaid Article, the NCLT reached the conclusion that since the limitation period was 12 years from the date on which the money suit has become due, the aforesaid claim was filed within limitation and hence admitted the Section 7 application. The NCLAT vide the impugned judgment held, following its earlier judgments, that the time of limitation would begin running for the purposes of limitation only on and from 1-12-2016 which is the date on which the Insolvency and Bankruptcy Code was brought into force. Consequently, it dismissed the appeal. 4. Mr Aditya Parolia, learned counsel appearing on behalf of the appellant has argued that Article 137 being a residuary article would apply on the ....
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.... of Company Appeal (AT) (Insolvency) No. 1121 of 2019 titled as "Ishrat Ali vs. Cosmos Cooperative Bank Ltd. & Anr.":- "11. The aforesaid decisions of the Hon'ble Supreme Court and this Appellate Tribunal make it clear that for the purpose of computing the period of limitation of application under Section 7, the date of default is 'NPA' and hence a crucial date." 9. In the aforesaid Judgment rendered by this Appellate Tribunal, it has been laid down in unambiguous terms that mere filing of a suit for recovery or a decree passed by a Court cannot be held to be deferment of default. In this regard, it would be appropriate to extract paras 15 and 16 of the aforesaid Judgment as under: "15. A suit for recovery of money can be filed only when there is a default of dues. Even if the decree is passed, the date of default does not shift forward to the date of decree or date of payment for execution. Decree can be executed within specified period i.e. 12 years. If it is executable within the period of limitation, one cannot allege that there is a default of decree or payment of dues. 16. Therefore, we hold that a Judgment or a decree passed by a Court for recovery of money by Civil....
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....payable in law even if the period of computation is reckoned from the date of last acknowledgment dated 12th April, 2004. It is apt to notice that Section 7 of the 'I&B Code' has been brought into force on 1st December, 2016 vide S.O. 3594(E) dated 30th November, 2016. Therefore, triggering of Corporate Insolvency Resolution Process in respect of defaults occurring prior to 1st December, 2013 would be impermissible in view of application of Article 137 of the Limitation Act, 1963. This view is fortified by the Judgments referred to hereinabove. 11. In view of the foregoing discussion, we find that the arguments canvassed on behalf of the Appellant that initiation of 'Corporate Insolvency Resolution Process' at the instance of the 'Financial Creditor' was unsustainable as the same had been filed well beyond the period of three years from the date the account of 'Corporate Debtor' was classified as NPA. In these circumstances, we uphold the argument advanced on behalf of the Appellant that the subsequent developments in the form of recovery proceedings before the Debts Recovery Tribunal culminating in passing of recovery order/ decree would not shift the date of default leading to c....