SESH NATH SINGH & ANR. versus BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD. AND ANR.

SESH NATH SINGH & ANR. versus BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD. AND ANR.

The Limitation Act applies to IBC proceedings 'as far as may be' under Section 238A; applications under Section 7 are governed by Article 137 (three-year limitation from date of default); courts/tribunals (NCLT/NCLAT) may condone delay under Section 5 where sufficient cause exists and a formal Section 5 application is not mandatory; Section 14 exclusion of time applies to time spent prosecuting bona fide civil proceedings (including SARFAESI proceedings) in a forum lacking jurisdiction, and such exclusion can be claimed for the period during which those proceedings were prosecuted with due diligence even if they were stayed and not formally terminated, therefore the Financial Creditor's...

Parties
Appellants: Sesh Nath Singh & Anr.; Respondent (financial Creditor): Baidyabati Sheoraphuli Co-operative Bank Ltd.; Corporate Debtor: Debi Fabtech Private Ltd.
Jurisdiction
India
Judgment Date
22 March 2021
Procedural Posture
Civil Appeal / Appeal to Supreme Court Under Section 62 of the Insolvency and Bankruptcy Code, 2016 Against NCLAT Judgment Dismissing Company Appeal (at) (insolvency) No.672 of 2019
Outcome
Appeal dismissed
Legal Topics
Section 7 IBC, Section 238 a IBC, Section 5 Limitation Act, Section 14 Limitation Act, Applicability of Limitation Act to Nclt/nclat, Condonation of Delay, Time Bar/limitation Computation, Exclusion of Time for Proceedings in Wrong Forum
Insolvency and Bankruptcy Limitation Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (sarfaesi) Act Section 7 IBC Section 238 a IBC Section 5 Limitation Act Section 14 Limitation Act Applicability of Limitation Act to Nclt/nclat +3 more

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Parties

Sesh Nath Singh & Anr.

Appellants

Baidyabati Sheoraphuli Co-operative Bank Ltd.

Respondent (financial Creditor)

Debi Fabtech Private Ltd.

Corporate Debtor

Procedural Posture

Civil Appeal / Appeal to Supreme Court Under Section 62 of the Insolvency and Bankruptcy Code, 2016 Against NCLAT Judgment Dismissing Company Appeal (at) (insolvency) No.672 of 2019

Legal Issues

  1. 1 Whether delay beyond three years in filing an application under Section 7 of the IBC can be condoned in the absence of a formal application under Section 5 of the Limitation Act
  2. 2 Whether Section 14 of the Limitation Act applies to applications under Section 7 of the IBC and whether exclusion under Section 14 is available only after earlier proceedings before a wrong forum have terminated

Ratio Decidendi

The Limitation Act applies to IBC proceedings 'as far as may be' under Section 238A; applications under Section 7 are governed by Article 137 (three-year limitation from date of default); courts/tribunals (NCLT/NCLAT) may condone delay under Section 5 where sufficient cause exists and a formal Section 5 application is not mandatory; Section 14 exclusion of time applies to time spent prosecuting bona fide civil proceedings (including SARFAESI proceedings) in a forum lacking jurisdiction, and such exclusion can be claimed for the period during which those proceedings were prosecuted with due diligence even if they were stayed and not formally terminated, therefore the Financial Creditor's...

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Judgment and order of the NCLAT dated 22.11.2019 upheld; order of the NCLT dated 25.04.2019 admitting the Section 7 application and initiating CIRP is not interfered with