14/10/2020

Sh. B. Prashanth Hegde Suspended Managing Director, Metal Closures Pvt. Ltd. Vs. State Bank of India – NCLAT New Delhi

In this case the Corporate Debtor was declared to be Non –performing Asset on 28th May 2014. The date was later changed to 31st January 2010. Therefore, if the position taken by the Financial Creditor Bank is taken as correct, ‘Default’ occurred on or before 31st January 2010. The period of Limitation for the same would expire on 30th January 2013. The Application for initiation is filed on 23rd July 2018. The contention of the Respondent that their right accrued only on 01st December 2016 is not consonant to the ratio of judgement in B K Educational Services wherein the Hon’ble Supreme Court has held that “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, Article 137 of the Limitation Act gets attracted. “The right to sue”, therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the Application, the Application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, Section 5 of the Limitation Act may be applied to condone the delay in filing such Application“. In view of the law enunciated by the Hon’ble Supreme Court of India in the above-mentioned cases and the facts and circumstances of this case, it is clear that the Application filed under Section 7 of the Code by the Financial Creditor is barred by Limitation.

Sh. B. Prashanth Hegde Suspended Managing Director, Metal Closures Pvt. Ltd. Vs. State Bank of India – NCLAT New Delhi Read Post »

Adjudicating Authority is to follow the ingredients of Service of Notices & Processes as per Rule 38 of the NCLT Rules, 2016, the serving of advance copy of the application to the Corporate Debtor cannot be construed/deemed to be service of notice – Mr. Bhaskar Vs. M/s Sai Precious Traexim Pvt. Ltd – NCLAT New Delhi

NCLAT held that as regards the plea taken that the Corporate Debtor was never issued with a notice by the Adjudicating Authority it is to be pointed out by the Appellate Tribunal that the Adjudicating Authority is to follow the ingredients of ‘Service of notices and processes’ as per Rule 38 of the NCLT Rules, 2016. If a notice was not duly served upon the concerned party or he was prevented by any sufficient cause from appearing when the petition / application was called for hearing, the Adjudicating Authority(Tribunal) may pass an order setting aside the ex parte hearing against him, on such terms as it thinks fit. In the instance case, the Appellant has come out with a plea that the Corporate Debtor was never issued with notice by the Adjudicating Authority and since the ‘serving’ of advance copy of the application to the ‘Corporate Debtor’ cannot be construed / deemed to be service of notice in the eye of Law.

Adjudicating Authority is to follow the ingredients of Service of Notices & Processes as per Rule 38 of the NCLT Rules, 2016, the serving of advance copy of the application to the Corporate Debtor cannot be construed/deemed to be service of notice – Mr. Bhaskar Vs. M/s Sai Precious Traexim Pvt. Ltd – NCLAT New Delhi Read Post »

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