Will the Limitation Act apply to proceedings under the Insolvency and Bankruptcy Code?.The Supreme Court will decide this issue as a Bench of Justices Rohinton Fali Nariman and Navin Sinha today issued notice in the appeal against an order of the National Company Law Appellate Tribunal (NCLAT)..The appeal has been filed by BK Educational Services Pvt. Ltd. against NCLAT Order dated November 7, 2017, whereby the NCLAT held that the provisions of the Limitation Act were not applicable for initiation of Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code (IBC)..It is the appellant’s contention that the NCLAT failed to consider numerous judgments of the Supreme Court, which had held that the Limitation Act, 1963 is based upon public policy to fix a life span of a legal remedy for the purpose of general welfare.The appellant has submitted that the proceedings before the Court/Tribunal will be governed by the Act constituting the said Court/Tribunal to the extent it is not contrary to the special statute.“It is submitted that a person should not be allowed to initiate Corporate Resolution Process with respect to stale debts.”Further, the appellant has placed reliance on Section 433 of the Companies Act, which provides for application of the Limitation Act to proceedings before the NCLT.“IBC did not expressly exclude the applicability of Section 433 of the Companies Act, 2013, and hence, the said provision cannot be said to be inapplicable to proceedings under the IBC.”The appellant has also pointed out an an anomaly that will result as a consequence of the NCLAT order.“NCLAT Order has erred in holding that the right to apply under section 7 of the I&B Act, for initiating Corporate Insolvency Resolution Process, accrues from 1.12.2016 i.e. from the date the I&B Code came into force. It is submitted that in the event the rational given by NCLAT is given effect to it will lead to an anomalous situation where even in case of defaults in respect of debts more than fifty years ago a party will be able to initiate Corporate Insolvency Proceedings under the I&B Code.”.The Court today issued notice in the matter and also stayed the order of NCLAT.The appellant was represented by Dua Associates with Robin David, Chitranshul Sinha, Dhiraj Philip and Febin Verghese appearing for them.
Will the Limitation Act apply to proceedings under the Insolvency and Bankruptcy Code?.The Supreme Court will decide this issue as a Bench of Justices Rohinton Fali Nariman and Navin Sinha today issued notice in the appeal against an order of the National Company Law Appellate Tribunal (NCLAT)..The appeal has been filed by BK Educational Services Pvt. Ltd. against NCLAT Order dated November 7, 2017, whereby the NCLAT held that the provisions of the Limitation Act were not applicable for initiation of Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code (IBC)..It is the appellant’s contention that the NCLAT failed to consider numerous judgments of the Supreme Court, which had held that the Limitation Act, 1963 is based upon public policy to fix a life span of a legal remedy for the purpose of general welfare.The appellant has submitted that the proceedings before the Court/Tribunal will be governed by the Act constituting the said Court/Tribunal to the extent it is not contrary to the special statute.“It is submitted that a person should not be allowed to initiate Corporate Resolution Process with respect to stale debts.”Further, the appellant has placed reliance on Section 433 of the Companies Act, which provides for application of the Limitation Act to proceedings before the NCLT.“IBC did not expressly exclude the applicability of Section 433 of the Companies Act, 2013, and hence, the said provision cannot be said to be inapplicable to proceedings under the IBC.”The appellant has also pointed out an an anomaly that will result as a consequence of the NCLAT order.“NCLAT Order has erred in holding that the right to apply under section 7 of the I&B Act, for initiating Corporate Insolvency Resolution Process, accrues from 1.12.2016 i.e. from the date the I&B Code came into force. It is submitted that in the event the rational given by NCLAT is given effect to it will lead to an anomalous situation where even in case of defaults in respect of debts more than fifty years ago a party will be able to initiate Corporate Insolvency Proceedings under the I&B Code.”.The Court today issued notice in the matter and also stayed the order of NCLAT.The appellant was represented by Dua Associates with Robin David, Chitranshul Sinha, Dhiraj Philip and Febin Verghese appearing for them.
