Abhijit Jasrasaria Vs JOP International Ltd. (NCLAT Delhi)
Summary: The National Company Law Appellate Tribunal (NCLAT), New Delhi, dismissed an appeal filed by Abhijit Jasrasaria against JOP International Ltd., upholding the rejection of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, as barred by limitation. The appellant had deposited Rs. 87,38,000/- towards the purchase of shops under a Buyers’ Agreement dated 24.02.2009. The agreement contemplated delivery of possession, but the shops were not handed over. In Part IV of his Section 7 application, the appellant himself specified 24.10.2010 as the initial date of default and claimed that the default continued because possession had not been delivered. The National Company Law Tribunal, New Delhi Bench-V, rejected the insolvency application by its order dated 07.01.2021, prompting the appellant to approach the NCLAT.
The appellant contended that the corporate debtor’s continuing failure to deliver possession constituted a continuing cause of action and that his application could not be considered time-barred. He further argued that he was entitled to pursue remedies under both the Real Estate Regulatory Authority framework and the IBC. The respondent pointed out that the appellant had already obtained an order from UP RERA dated 06.03.2019 and had initiated execution proceedings, in which an order was passed on 18.11.2021. The NCLAT accepted that a litigant may pursue different remedies available under law, but emphasised that each proceeding must independently satisfy the applicable statutory requirements, including limitation.
Examining Article 137 of the Limitation Act, 1963, the Tribunal held that an application under Section 7 of the IBC must be instituted within three years from the date when the right to apply accrues. Since the appellant expressly identified 24.10.2010 as the date of default, limitation commenced from that date. The subsequent non-delivery of possession did not stop the limitation period from running or create a fresh limitation period for the insolvency application. Although continued non-delivery could constitute a ground for proceedings before RERA, it did not render an otherwise time-barred Section 7 application maintainable. The NCLAT also declined to examine the argument that the UP RERA order dated 06.03.2019 gave rise to a fresh limitation period, because no such foundation or pleading had been included in the original Section 7 application. Accordingly, the Tribunal found no reason to interfere with the NCLT’s order and dismissed the appeal.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
Heard Learned Counsel for the Appellant and Learned Counsel for the Respondent.
2. This Appeal has been filed against the order dated 07.01.2021 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench-V by which Application filed by the Appellant under Section 7 of the ‘I&B Code’ has been rejected. The Appellant has filed an Application under Section 7 claiming dues of Rs. 87,38,000/- which was deposited by him towards cost of shops through Buyers’ Agreement dated 24.02.2009. Copy of the Application filed under Section 7 has been brought on record at page 116 of the paper book. Part IV of the Application which gives the ‘particulars of the financial debt’ is to the following effect:-
Part-IV
| PARTICULAR OF FINANCIAL DEBT | ||
|---|---|---|
| 1. | TOTAL AMOUNT OF DEBT GRANTED DATE(S) OF DISBURSEMENT | Rs.87,38,000/- deposited towards the cost of the shops acknowledged through Buyers Agreement dated 24.02.2009 + Intt. Rs.32496260/- in Aggregate. |
| 2. | AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF AMOUNT AND DAYS OF DEFAULT IN TABULAR FORM) | As per the Agreement dated 24.02.2009. The Financial Creditor was to get the possession of the property within 12 months from the date of signing the BA i.e.24.02.2010, hence the initial date of d efault is 24.10.2010, which is still continuing as no possession till date. Working for Computation of amount and days is annexed herewith and marked as ANNEXURE P-3. |
3. The date of default given by the Appellant himself is 24.10.2010. The Application under Section 7 has to be filed within the limitation as provided under Article 137 of the Limitation Act i.e. within three years from “when the right to apply accrues”.
4. Learned counsel for the Appellant submits that since the possession has not been delivered he has continuing cause of action and his right to file
Petition/ Application is still continuing and Application cannot be said to be barred by time.
5. Learned Counsel for the Respondent submits that the Appellant has already filed execution of the order passed by the RERA dated 06.03.2019 in favour of the Appellant in pursuance of which execution has already been ordered on 18.11.2021, due to which fact the Application under Section 7 need not be entertained.
6. Learned Counsel for the Appellant submits that he has right to take his remedy before RERA as well as under Section 7 of the Code.
7. We have considered the submissions of the Learned Counsel for the parties and perused the record.
8. Insofar as submission of the Counsel for the Appellant that he has right to avail all the remedies provided in law is concerned, we concur with the submission, a litigant can avail all the remedies provided in law, be it complaint filed under Real Estate Regulatory Authority or under IBC. We in the present case are concerned with the Application filed by the Appellant under Section 7 of the IBC. In Part-IV of the Application which we have already extracted above, the Appellant himself has shown the date of default as 24.10.2010. The limitation for filing an Application under Section 7 is provided under Article 137 of the Limitation Act which is to the following effect:-
| Description of application | Period of limitation | Time from which period begins to run |
|---|---|---|
| 137. A ny other application for which no period of limitation is provided elsewhere in this division | T hree years | W hen the right to apply accrues. |
9. To meet the limitation provided under Article 137, submission of the Counsel for the Appellant is that he has a continuing cause of action since as per Agreement dated 24.02.2009, the Appellant had not been given possession of the shops. The fact that Appellant was not given possession of the shops by the Corporate Debtor may be ground and reason for filing complaint under Real Estate Regulatory Authority Act before UP RERA which complaint has already been filed by the Appellant and was allowed on 06.03.2019 but for filing Application under Section 7, Application has to be within three years from the date when right to apply accrues. When default of a financial debt was committed on 24.10.2010 as claimed by the Appellant, the right to apply accrue to him and no other date of default having been given in Part-IV, the limitation shall not stop running merely because Appellant claims that he has not been given possession of the shops. The Application was thus clearly barred by time and could not have been entertained by the Adjudicating Authority. The Application having been filed beyond three years from the date when right to apply accrues, the same deserves to be rejected.
10. Learned Counsel for the Appellant lastly contended that he will have fresh period of limitation after the order dated 06.03.2019 passed by the UP RERA. The said submission needs no consideration since neither there was any foundation in the Application filed under Section 7 nor there was any pleading that fresh period of limitation shall start from 06.03.2019. Hence, we need not consider the said submission in the present Appeal.
11. As noted above, on the complaint filed by the Appellant, an order has been passed by the UP RERA on 06.03.2019 directing for recovery of amount of Rs. 87,38,000/- along with interest/. The Appellant has already filed Execution Application to execute the order dated 06.03.2019 which as per submission of the counsel for the Appellant has already been allowed on 18.11.2021.
12. In view of the above, we see no reason to interfere with the order passed by the Adjudicating Authority dismissing Section 7 Application filed by the Appellant. The Appeal is dismissed.
