# In the matter of A. Maheshwaran Vs. Stressed Assets Stabilization Fund & Anr. CA(AT)(Insolvency) 954-2019

> NCLAT judgment dated 2019-09-16. Citation: TCN-2019-NCLAT-00277. The appeal was preferred by the Appellant Shareholder of M/s. Shree Vaishnodevi Mills Pvt.…

- **Court:** NCLAT
- **Order date:** 16 Sept 2019
- **Citation:** TCN-2019-NCLAT-00277
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/a-maheshwaran-vs-stressed-assets-stabilization-fund-anr-ca-3b27e13b

## Summary

### Background

The appeal was preferred by the Appellant Shareholder of M/s. Shree Vaishnodevi Mills Pvt. Ltd. against the order dated July 22, 2019, passed by the Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai, which admitted an application under Section 7 of the I&B Code preferred by M/s. Stressed Assets Stabilization Fund. The appellant argued that the claim was barred by limitation.

## Facts

The Appellant, a shareholder of M/s. Shree Vaishnodevi Mills Pvt. Ltd., filed an appeal against an order passed by the Adjudicating Authority (NCLT, Chennai) on July 22, 2019. The NCLT order admitted an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) filed by M/s. Stressed Assets Stabilization Fund. The Appellant argued that the claim was barred by limitation, citing a 12-year limitation period for mortgage-related claims under Article 62 of the Limitation Act, 1963. The Appellant also claimed that there was a dispute regarding the amount claimed by the Respondent (Financial Creditor). The court noted that the Appellant accepted that there was a mortgage of property made by the Corporate Debtor.

## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code is maintainable …

**Ratio:** The scheme of the Code ensures that when a default takes place, in the sense that a debt

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**Reasoning:** The court reasoned that even if a debt is disputed, the application under Section 7 is

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate the Corporate

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**Application:** The court applied the ratio to the facts by stating that even if the appellant

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** A. Mahesh…
- **Respondents:** M/s. Shree…; Stressed Assets…

## Timeline

- **2019-07-22 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai, passed…
- **2019-09-16 — Appeal F…**: The Appellant Shareholder of M/s. Shree Vaishnodevi Mills Pvt. Ltd. preferred an appeal…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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