Coimbatore: In a significant ruling, the National Company Law Appellate Tribunal (NCLAT) has said that time barred debt or stale debt those for which no action has been taken for three years from due datecannot be a reason for not allowing initiation of corporate insolvency resolution process under IBC (Insolvency and Bankruptcy Code).
A debt is deemed time barred if the lender or the supplier of goods and services does not recover the money or does not take legal action within three years from the due date. For instance, if an amount is due in April 2015, recovery action should be taken in an appropriate forum/court by April 2018.
NCLAT held that merely on the basis of the averment that the debt covered by the claim of the operational cr…
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