TaxTMI 
TaxTMI 
2020 (10) TMI 688
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.... Parties are represented by their original status in the Company Petition for the sake of convenience. 2. These brief facts of the case are as follows: The State Bank of India, Assets Management Branch, Bangalore on behalf of Consortium Banks filed an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (from now on referred to as the 'I&B Code') for initiation of 'Corporate Insolvency Resolution Process' against M/s. Metal Closures Pvt Ltd ('Corporate Debtor'). The Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench vide Impugned Order dated 14th December 2018 having admitted the Application, which is challenged by the Appellant, ex-Director of the Corporate Debtor. 3. The case of the Corporate Debtor was that the State Bank of India granted various credit facilities to the 'Corporate Debtor' since 2007. Subsequently, the Corporation Bank started giving credit facilities to the 'Corporate Debtor' since 14thAugust 2009. On 31st January 2010, the account of the 'Corporate Debtor' was classified as a 'Non-Performing Asset' (hereinafter 'NPA') by State Bank of India. However....
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.... issued earlier under Section 13(2) of the SARAFAESI Act, 2002. The 'Corporate Debtor' moved in an Appeal under Section 17 of the SARAFAESI Act to seek relief to quash the taking over possession of the Plants of the 'Corporate Debtor' and appointment of Concurrent Auditor. 11. The Appellant submits that the initiation of the CIRP was fraudulent, malicious and not intended for any resolution. It was meant to act as a process for recovery of the alleged dues of the Financial Creditor and defeat the Cost and Compensation claim under Section 19 of the SARFAESI Act and damages under Section 19(8) of the RDDB Act, which together is higher than alleged due to Banks. However, the Bank ultimately moved an Application under Section 7 of the I&B Code, which was admitted by the Adjudicating Authority. 12. The Appeal against the said Order of admission was dismissed by this Appellant Tribunal, which was challenged before the Hon'ble Supreme Court in Civil Appeal No.8010 of 2019 wherein the Hon'ble Supreme Court set aside the Order of this Appellate Tribunal and remanded back the matter to this Appellate Tribunal with the following direction: "Heard the lea....
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....ioned in Form-1. Given the law laid down in Supreme Court of India in case of Gaurav Hargovindbhai Dave 2019 (10) SCC 572, Jignesh Shah 2019 (10 SCC 570), Sagar Sharma 2019 (10) SCC 353, B K Education 2019 (11) SCC 633, Babulal Vardharji Gurjar (Civil Appeal No.6347) and Vasudeo Bhojnani and others 2019 (9) SCC 158, the period of Limitation for Section 7 or 9 and Applications under the Insolvency and Bankruptcy Code 2016 would be governed by Article 137 of the Limitation Act, 1963. 17. The Appellant contends that due to repeated failures of M/s. Metal Closures Pvt Ltd ('Corporate Debtor') to regularize the accounts of the members of the Consortium of Banks, the debts of the Corporate Debtor were classified as Non Performing Asset on 31st October 2010 by State Bank of India; by Punjab National Bank on 30th June 2014; by Corporation Bank on 31st December 2014; and by UCO Bank on 31st December 2014. Even if the date of default is taken to be the last of the four dates, when the account of the Corporate Debtor was classified as NPA, i.e. 31st December 2014, then also it is clear that default occurred prior to 31st December 2014. As per Article 137 of the Limitation Act, thre....
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..... The Adjudicating Authority applied Article 62 of the Limitation Act and reached to the conclusion that since the limitation period was twelve years from the date on which money sued has become due, the claim was within Limitation and hence, admitted the Application. The NCLAT applied another reasoning that the time of Limitation would begin to run only from 01.12.2016, the date on which the Code was brought into force. This Court took note of the contentions of both the parties and while accepting the submissions that time began to run on 21.07.2011 (the date of NPA), held that the Application filed under Section 7 was time-barred." (emphasis supplied) 21. Thus, it is clear that the Application filed by the Respondents under Section 7 of the Code in the present case is an effort to revive a dead debt. The date of default is crucial to determine the date when the cause of action accrued. In this case, the Respondent has not mentioned the date of default. In the case of Gaurav Hargovindbhai Dave (supra), Hon'ble Supreme Court has considered that the date of default to be the date of NPA. Therefore, the date of default, in this case, is 31st January 2010. The righ....