# In the matter of Smt. Sangita Agarwal & Ors. Vs. Limtex Tea & Industries Limited & Anr. Company Appeal (AT) (Insolvency) No. 1496 of 2019

> NCLAT judgment dated 2021-03-03. Citation: TCN-2021-NCLAT-00336. This case involves an appeal against an order dated 21.11.2019 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 3 Mar 2021
- **Citation:** TCN-2021-NCLAT-00336
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/smt-sangita-agarwal-ors-vs-limtex-tea-industries-limited-anr-company-appeal-977898fd

## Summary

### Background

This case involves an appeal against an order dated 21.11.2019 passed by the National Company Law Tribunal (NCLT), Kolkata Bench, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) filed by Limtex Tea & Industries Limited (Respondent No. 1) for initiation of Corporate Insolvency Resolution Process (CIRP) against Durga Prasad Agarwal and Biswanath Mondal (Appellants/Corporate Debtor). During the pendency of the appeal, Durga Prasad Agarwal expired, and his legal heirs were allowed to substitute him. The appellants challenged the NCLT order, arguing that the application under Section 7 of the IBC was barred by limitation and that the cheque issued by them was forged.

## Facts

In 2011, Limtex Tea & Industries Limited (Respondent No. 1), extended a loan of Rs. 25,00,000 to Durga Prasad Agarwal and Biswanath Mondal (Appellants/Corporate Debtor). The loan was acknowledged by the Corporate Debtor. The Corporate Debtor issued a cheque dated 27.04.2015 for Rs. 25,00,000, which was dishonored due to 'Fund Insufficient'. The Financial Creditor issued a demand notice on 29th June, 2015, which was received by the Corporate Debtor on 30th June, 2015. The Corporate Debtor failed to pay the amount. The Financial Creditor filed an application under Section 7 of the IBC on 17th April, 2018. The Appellants claimed the application was barred by limitation and the cheque was forged. The NCLT admitted the application, leading to the appeal. During the

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## Issues and analysis

### Issue 1: Whether the Application under Section 7 of the IBC filed by the Respondent No. 1 is barred by …

**Ratio:** The principle of limitation dictates that legal proceedings must be initiated within a

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**Reasoning:** The court found that the date of default, as per the Financial Creditor's application,

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**Interpretation:** Section 7 of the IBC requires an application to be filed within the limitation

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**Application:** The court applied the principle of limitation to the facts of the case, noting

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## Parties

- **Judges:** Anant Bijay…; Shreesha…
- **Appellants:** Sangita A…
- **Respondents:** Durga Prasad…; Limtex Tea &…
- **Advocates:** Abhijeet…; Suhita Mukhopadhya…; +4 more

## Timeline

- **2011-06-06 — Loan Disbur…**: Limtex Tea & Industries Limited disbursed a loan…
- **2015-04-27 — Cheque I…**: The Corporate Debtor issued a cheque for…

## 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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