Lawstreet Journal

Section 14 of thr Limitation Act, 1963 Applies to Applications filed Under Section 7, IBC 2016: SC [READ JUDGMENT]

Lawstreet Journal 25 Mar 2021 11:47pm

Image courtesy: Lawstreet Journal Judiciary Section 14 of thr Limitation Act, 1963 Applies to Applications filed Under Section 7, IBC 2016: SC [READ JUDGMENT]

A bench comprising Justices Indira Banerjee and Hemant Gupta of the apex court while dealing with the case ‘Sesh Nath Singh Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd.’ has held that:

In an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 the applicant can claim the benefit of Section 14 of the Limitation Act, in respect of proceedings under the SARFAESI Act, 2002.
 

The bench also held that:

SAFAESI proceedings are 'civil proceedings' for the purposes of Section 14 of the Limitation Act, 1963.

It was further held that that there is no rule that the exclusion of time under Section 14 of the Limitation Act, 1963 (which allows for exclusion from the limitation period the time spent litigating before wrong forum) is available, only after the proceedings before the wrong forum terminate. 

Background of the case:

The National Company Law Appellate Tribunal (NCLAT) rejected the contention raised by Corporate Debtor that since the account of the Corporate Debtor had been declared NPA on 31st March, 2013 and since the application under Section 7 of IBC had been filed on 27th August, 2018, after almost five years and five months from the date of accrual of the cause of action, the application filed by financial creditor is barred by limitation. 

The NCLAT held that, the applicant, the financial creditor, had bona fide, within the period of limitation, initiated proceedings against the Corporate Debtor under the SARFAESI Act, 2002 and was thus entitled to exclusion of time under Section 14(2) of the Limitation Act. 

The NCLAT, after exclusion of the period of… Continue Reading...


Tagged: Supreme Court of India  
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