Status as on- 06/02/2023
The NCLAT Chennai held that section 238 of IBC will override the Limitation Act it was held in the matter of M/s Platinum Rent A Car Pvt. Ltd. vs. M/s Quest Offices Limited. The latter filed the application under section 7 of the code and the same was admitted by the tribunal over the amount of Rs. 10.95,01,185. The bench said they will not entertain the condonation application as it was delayed by 55 days by the Corporate Debtor.
According to section 61 of the code it is said that an appeal can be filed in 30 days and there is a concession of 15 days also so it is like 45 days. Now here in this case the application was filed after 55 days, hence it was not entertained by the NCLAT.
The reasoning being given by the NCLAT is that section 238 will override the limitation Act. There is one more reasoning given by the Supreme Court that can be taken into consideration when we talk about the overriding effect of IBC over the Limitation Act. It was held by the Hon’ble Supreme Court of India and it has been said that the Law which comes latest in the market will prevail over the other laws the reason being that they have been made with taking care of the present scenario and by this, they should prevail.
Previously also IBCs have overridden many acts which was a question of law in many scenarios whether it is a state law or central law. In the case of Innoventive Industries Limited v. ICICI Bank Limited ICICI filed the claim on money given to Innoventive. The corporate debtor refused to give the money as they were covered under the MRUA Act. When the case went to the court, the court said that MRUA and IBC are two different things because they are enacted in two different domains. Finally, the Supreme Court held that the IBC would prevail.
In the recent case given by the retired Hon’ble Supreme court Judge CJI Ramana. He said that in case of any conflict, the IBC will override the Customs Acts. When the moratorium applies then the custom bodies have no right to alienate the asset of the corporate debtor and neither initiate the recovery of dues by means of sale.
Once the moratorium is imposed then the custom authority has limited access to the asset and that too for the purpose of determining the quantum of customs duty. The section has been designed in a manner in which it is shown that the amount can be recovered to the fullest and the basic elements of the code must be on the top by the virtue of 238 the moratorium section 14 is also got supported by it as there is no one who can interrupt the CIRP proceedings and Time element which is the essence of the IBC will be protected in the most desirable manner.
Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at ibc@centrik.in
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