44 SEBI & CORPORATE LAWS - MAGAZINE[Vol. 154
CASE DIGEST
[2019] 154 SCL 44 (Mag.)/106 taxmann.com 279 (NCL-AT)
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHIBabulal Vardhaji Gurjar v. Veer Gurjar Aluminium Industries (P.) Ltd.
JUSTICE S.J. MUKHOPADHAYA, CHAIRPERSON
AND BANSI LAL BHAT, JUDICIAL MEMBER
COMPANY APPEAL (AT) (INSOLVENCY) NO. 549 OF 2018†
MAY 14, 2019u Since Bankruptcy Code came into effect on 1-12-2016, right to apply for
initiating insolvency process accrued only after 1-12-2016; where default
was committed by corporate debtor in July 2018, application to initiate CIRP
filed much prior to end of three years from 1-12-2016 could not be held to
be barred by limitation
u Where financial facilities sanctioned to corporate debtor were secured
by mortgage of immovable properties of corporate debtor, thus, when cor-
porate debtor committed default on 8-7-2011, instant application for CIRP
filed on 21-3-2018 was within limitation period of twelve years and same
was to be admitted
Section 238A of the Insolvency and Bankruptcy Code, 2016, read with Part V of first
division of the Limitation Act, 1963 - Limitation period - Whether since Bankruptcy
Code came into effect on 1-12-2016, right to apply for initiating insolvency process
accrued only after 1-12-2016 - Held, yes - Whether thus, for default committed by
corporate debtor in July 2011 application filed to initiate CIRP proceedings much
prior to end of three years from 1-12-2016 i.e. in year 2018 could not be held to
be barred by limitation - Held, yes - Bank sanctioned financial facilities to R1-
corporate debtor - Said facilities were secured by equitable mortgage of immovable
properties of corporate debtor - Corporate debtor failed to repay - Thus, financial
creditor filed instant application to initiate CIRP against corporate debtor - Cor-
porate debtor raised objection that claim was barred by limitation - It was noted
that mortgage was created over immovable property of corporate debtor and same
was offered as security for loan thus, limitation period of 12 years would apply,
in case of default - Whether in instant case where date of default was 8-7-2011,
†Arising out of order of NCLT, Mumbai dated 9 - 8 - 2018.