Issue for consideration
NCLAT dismissed the appeal filed by the appellant upholding the order passed by the Adjudicating Authority whereby it admitted the application u/s.7, Insolvency and Bankruptcy Code, 2016 filed by Respondent No.2-Secured Creditor against the Corporate Debtor, after condoning the delay. Respondent No.2 whether entitled to the benefit of s.18, Limitation Act and whether s.5 thereof would also be applicable. Insolvency and Bankruptcy Code, 2016 – s.7 – Limitation Act, 1963 – ss.18, 5 – Respondent No.2 filed application u/s.7 against the Corporate Debtor on 22.01.20 along with the application for condoning delay of 1392 days – Later, it stated that the delay was only of 662 days in view of the acknowledgement in the Balance Sheet of the Corporate Debtor for the financial year ending 31.03.2015 – Appellant inter alia pleaded that Respondent No.2 admitted in its s.7 petition that there was a delay of 1392 days – According to it, the Corporate Debtor was declared as NPA on 28.06.2013, w.e.f 31.03.2013, as per the Balance Sheet and the limitation of three years would expire on 31.03.2016 and thus, the application u/s.7 filed in 2020 was barred by limitation – Whether the debt acknowledged in the balance sheet of the financial year ending on 31.03.2015 and the three OTS proposals would give a fresh life of limitation of three years from each of the respective dates: Held: Respondent No.2 declared the Corporate Debtor as an NPA on 28.06.2013 – Therefore, the limitation period would be three years from the last date of the financial year previous to the declaration of NPA, which would be 31.03.2013, and would run up to 31.03.2016 – If there were no further intervening circumstances or developments relating to acknowledgment, the petition u/s.7 would be barred by limitation as contended by the appellant – However, there are four major acknowledgments made by the Corporate Debtor after the declaration of the NPA and within the expiry of three years from the said date – Corporate Debtor in its balance sheet for the financial year 2014-15, which came to an end on 31.03.2015, acknowledged the debt in its balance sheet for the said year – A balance sheet acknowledging debt is also a document relevant for calculating the limitation – This acknowledgment of debt in the balance sheet is a valid acknowledgment for the benefit of s.18, Limitation Act – Petition u/s.7 was filed within three years from the date of the first, second and the third One-Time Settlement (OTS) proposals – Taking the date of acknowledgment of debt in Balance Sheet and the three OTS proposals the same were within the limitation under law or the extended limitation due to acknowledgments – Application of Respondent No.2 entitled to benefit of ss.5 and 18, Limitation Act and, therefore, was within time – No merit in the appeal. [Paras 13-15, 27, 28] Insolvency and Bankruptcy Code, 2016 – Limitation Act, 1963 – s.14:
Headnote
Held: s.14 of the Limitation Act will have no application in the present case inasmuch as the proceedings under the SARFAESI Act before the DRT cannot be said to be before a Court or Tribunal having no jurisdiction – Respondent No.2, being a Secured Creditor, would definitely have a right to invoke the power under the SARFAESI Act and the said proceedings cannot be said to be without jurisdiction – Therefore, no benefit u/s.14 would be admissible to Respondent No.2 – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. [Para 12] LIST OF CITATIONS AND OTHER REFERENCES
Dena Bank (Now Bank of Baroda) vs. C. Sivakumar Reddy and Another (2021) 10 SCC 330; Kotak Mahindra Bank Limited vs. Kew Precision Parts Private Limited and Ors (2022) 9 SCC 364; Asset Reconstruction Company (India) Limited vs. Bishal Jaiswal and Another (2021) 6 SCC 366 – relied on. Jignesh Shah & Anr. vs. Union of India & Anr. 2019 (10) SCC 750 : [2019] 12 SCR 678; M/s Invent Asset Securitisation & Reconstruction Pvt. Limited vs. M/s Girnar Fibres Ltd. 2022 SCC Online SC 808; Invent Assets Securitization and Reconstruction Private Limited vs. Xylon Electrotechnic Private Limited Civil Appeal No. 3783 of 2020; Vashdeo R. Bhojwani vs. Abhyudaya Co- Operative Bank Limited and Another 2019 (9) SCC 158:[2019] 12 SCR 75; B.K. Educational Services Private Limited vs. Parag Gupta and Associates 2019 (11) SCC 633:[2018] 12 SCR 794; Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Limited & Anr. 2020 (15) SCC 1; Ome Prakash Verma vs. Amit Jain & Anr. CA(AT) (Insolvency) No. 827 of 2020 passed by NCLT, (Principal Bench, Delhi); Rajendra Narottamdas Sheth and Another vs. Chandra Prakash Jain and Another (2022) 5 SCC 600; Gopal Sardar vs. Karuna Sardar (2004) 4 SCC 252:[2004] 2 SCR 826; Serish Maji vs. Nishit Kumar Dolui 1999 SCC Online Cal 58; Sesh Nath Singh and Another vs. Baidyabati Sheoraphuli Co-Operative Bank Limited and Another (2021) 7 SCC 313 - referred to. OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
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