A ‘power of attorney holder’ is competent to file an application on behalf of a financial creditor U/S 7 of the Insolvency and Bankruptcy Code- SC

D.D- September 30, 2021 

Respondent filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 which was admitted by the National Company Law Tribunal, Ahmedabad on 01.06.2020.  The Appellants are the suspended directors of the board of R.K. Infratel Ltd. filed an appeal which was rejected by the National Company Law Appellate Tribunal, Delhi (hereinafter referred to as the ‘NCLAT’). Approached Apex Court. Having two grounds – 1. A ‘power of attorney holder’ is not competent to file an application on behalf of a financial creditor and 2. the application under Section 7 filed was barred by limitation as it was not filed within three years from the date of default. It has been held Section 7 of the Insolvency and Bankruptcy Code, 2016 – general authorization –  to an officer of the financial creditor by means of a power of attorney – not disentitle such officer to act as the authorized representative of the financial creditor while filing an application under Section 7 on the ground authorization was granted through a power of attorney – objection  on the maintainability of the application on this ground is untenable. Section 3 and 18 of the Limitation Act –  suit, appeal or application –  after  limitation – dismissed – even not set up as a defence – acknowledgement of liability extending limitation – before the expiration limitation period –  acknowledgement of liability – of property or right has been made in writing signed by the party – a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. Appeal Dismissed. 

Rajendra Narottamdas Sheth & Anr.     

Versus 

Chandra Prakash Jain & Anr.