NCLAT New Delhi: CIRP Application Barred By Time Should Be Rejected Even If No Defence Of Limitation Raised

The National Company Law Appellate Tribunal (‘NCLAT’), Principal Bench, New Delhi comprising of Justice Ashok Bhushan(Chairperson) , Barun Mitra (Technical Member) and Arun Baroka (Technical Member), dismissed an appeal filed in Sheetal Impex Pvt. Ltd. vs. Shree Swastic Sales Corporation Pvt. Ltd. by Sheetal Impex Pvt. Ltd. (Appellant) against Shree Swastic Sales Corporation Pvt. Ltd. (Corporate Debtor) challenging the NCLT New Delhi’s order dated 15.03.2023 rejecting an application under Section 7 of the Insolvency and Bankruptcy Code (‘Code’) as barred by time. Background Facts: The Application under Section 7 of the Code was filed on 04.02.2020 which was held to be barred by time by the NCLT New Delhi Bench. The Appellant contended that there was confirmation of the account by the Corporate Debtor on 01.04.2016 and further TDS deduction was made on 09.06.2016. It is submitted that the Application filed on 04.02.2020, thus, was not barred by time. NCLAT Verdict: The NCLAT Principal Bench, New Delhi dismissed the appeal citing the Section 7 application under the Code as barred by time, and held that an application that is barred by time has to be rejected by the Court even if no Defence of Limitation was raised. The Tribunal observed that the amount became due on 01.04.2016 and the issue of limitation was never raised before the Court. Additionally, the Appellant submitted a letter dated 01.04.2016 to confirm the accounts. It observed that even if it is agreed that the confirmation of accounts extended the limitation period for the Appellant, the Application under Sectio 7 of the Code was filed on 04.02.2020 and was still time-barred even after April 1, 2016. Further, the TDS deduction on 09.06.2016 does not affect the limitation period in any way. Case Title: Sheetal Impex Pvt. Ltd. vs. Shree Swastic Sales Corporation Pvt. Ltd. Case No.: Comp. App. (AT) (Ins.) No. 640 of 2023 Click Here To Read/Download Order

NCLAT New Delhi: CIRP Application Barred By Time Should Be Rejected Even If No Defence Of Limitation Raised

Sachika Vij

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