BSH NEWS
The National Company Law Appellate Tribunal on Tuesday set aside an NCLT order that rejected an appeal by Reliance Asset Reconstruction Company Ltd (RARCL) to initiate insolvency proceeding against Narendra Plastics. The NCLAT also directed the NCLT to initiate the insolvency proceedings against the company.
A three-member NCLAT bench headed by Chairperson Justice Ashok Bhushan set aside the order passed by the Mumbai bench of the National Company Law Tribunal (NCLT) which on August 13, 2021, rejected RARCL’s plea to initiate insolvency proceedings.
The NCLT had said the RARCL’s plea was barred under limitations as it was filed beyond the prescribed limit of three years after default.
The tribunal had said the RARCL had filed a petition under section 7 of the Insolvency & Bankruptcy Code on May 8, 2019, while Narendra Plastics’ account was declared as NPA on June 30, 2014, which was prima facie filed after more than five years.
This was challenged by RARCL, which is registered as a securitization and reconstruction company, before the appellate tribunal contending that it was within the limitation period.
As per the Limitation Act, which is also applicable on the Insolvency & Bankruptcy Code (IBC) cases, any insolvency plea filed over defaults occurred over three years prior to the date of filing of the application are barred under article 137 of the act.
(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)
Download The Economic Times News App to get Daily Market Updates & Live Business News.