TaxTMI 
TaxTMI 
2021 (3) TMI 686
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.... of the L.S.P. Agro Ltd. Company (Corporate Debtor) filed this Appeal against the order dated 25.01.2020 passed by Ld. Adjudicating Authority (National Company Law Tribunal) Special Bench, Chennai in CP-IBA/210/2019. Whereby Ld. Adjudicating Authority admitted the Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (In Short I&B Code) filed by Respondent No. 1 (Financial Creditor) and initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. 2. Brief facts of this case are that on 06.03.1998 Industrial Development Bank of India (IDBI) granted a term loan facility of aggregate value of Rs. 650 lakhs to the M/s L.S.P. Agro Ltd. (Corporate Debtor). The aforesaid loan amount was disbursed to the....
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.... the Banks and Financial Institution Act, 1993. Thus, SASF on behalf of IDBI is competent for initiating CIRP against the Corporate Debtor. 5. It is pleaded that the Corporate Debtor had acknowledged the debt vide One Time Settlement Proposals (OTS Proposals) dated 10.09.2008, 27.01.2014, 27.05.2014, 08.07.2016, 30.10.2016 and 14.10.2017 However, the Corporate Debtor has not repaid the loan. Therefore, on 23.01.2019 the Respondent No. 1 (Financial Creditor) filed an Application under Section 7 of the I&B Code before the Adjudicating Authority to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. 6. During the pendency of the Application, DRT-II has allowed the O.A. on 29.04.2019 in favour of the Fina....
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....ubmitted that the Ld. Adjudicating Authority has erroneously held that DRT has ordered for payment on this basis it can be inferred that the debt is not time barred. Hon'ble Supreme Court in the case of Gaurav Hargovindbhai Dave Vs. Asset Reconstruction Company India Ltd. & Anr. (2019) 10 SCC 572 held that the Respondent was declared NPA on 21.07.2011. The Bank had filed two O.As before the DRT in 2012 to recover the total debt. Taking into consideration the facts, the Supreme Court held that the default having taken place and as the account was declared NPA on 21.07.2011, the Application under Section 7 of the I&B Code filed in 2017 is clearly barred by limitation. In the instant case the loan account of Corporate Debtor was declared NPA b....
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....the Respondent No. 1. Accordingly, Ld. Adjudicating Authority committed no error in admitting the Application under Section 7 of the I&B Code against the Corporate Debtor. Thus, no interference is called for by this Appellate Tribunal. 11. After hearing learned counsel for the parties, we have gone through the record. 12. The Application under Section 7 of the I&B Code for initiation CIRP against the debtor is maintainable only when a default has occurred. Hon'ble Supreme Court in the Case of B.K. Education Services Pvt. Ltd. Vs. Parag Gupta & Associates 2019 11 SCC 633 held that " the right to sue accrues" when a default occurs. If the default has occurred over three years prior to date of filing of the application under Section 7 of the....
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....Supreme Court held that the date of default to be taken into consideration for computing the period of limitation of application under Section 7. As the decision of Hon'ble Supreme Court is binding, we hold that mere filing of a suit for recovery or a decree passed by a Court cannot shift forward the date of default. 17. 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 cannot be shift forward to the date of decree or date of payment for execution as a 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. 18. Therefore, we ho....