Punjab National Bank vs Mr. Vijay Sitaram Dandnaik & Anr.

Court

Supreme Court of India

Date

30 August 2022

Case No.

Civil Appeal No. 2277 of 2021

Result

Allowed

Bench

S. Abdul Nazeer, V. Ramasubramanian

Citation

[2022] 18 S.C.R. 380 : 2022 INSC 887

Headnote

Insolvency and Bankruptcy Code, 2016: ss. 7, 238A – Limitation Act, 1963 – Art. 137 – Initiation of corporate insolvency resolution process by financial creditor – Limitation period – On facts, corporate debtor defaulted in repayment and became a NPA – Financial creditor-Bank filed a petition u/s. 7 to initiate Corporate insolvency resolution process against the Corporate Debtor – Bank also filed application before DRT for issue of certificate of recovery, wherein by order dated 01.11.2016, the DRT directed the corporate debtor and others including respondent no. 1 to jointly and severally pay to the Bank – In a parallel proceeding, the High Court directing the winding up of the Corporate Debtor – Petition u/s. 7 admitted by the NCLT by order dated 06.11.2019 – Challenge to, by the first respondent claiming to be 50% shareholder, promoter, director and creditor of the Corporate Debtor – NCLAT set aside the order of the NCLT on the ground that the claim of the Financial Creditor was barred by limitation – On appeal, held: Order of the DRT in the Original Application filed by the Bank u/s. 19 of the Act, 1993, is dated 01.11.2016 – It is only thereafter that the Corporate Debtor issued Balance and Security Confirmation letter dated 17.06.2017, apart from making a request for restructuring the loan – Thus, the application filed by the bank u/s.7 was clearly within three years from the date on which the “right to apply” in terms of Art. 137 accrued – Thus, the application filed by the Bank u/s. 7 was within the period of limitation – Recovery of Debts due to Banks and Financial Institutions Act, 1993.

Dena Bank vs. C. Shivakumar Reddy and Another

(2021) 10 SCC 330 : 2021 (7 ) JT 405 – relied on.

Jaipur Metals and Electricals Employees Organization vs. Jaipur Metals and Electricals Ltd. & Ors. (2019) 4 SCC 227 : [2018] 14 SCR 926; Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr. (2020) 15 SCC 1; B.K. Educational Services Private Limited vs. Parag Gupta and Associates (2019)

11 SCC 633 : [2018] 12 SCR 794; Jignesh Shah and Anr. vs. Union of India and Anr. (2019) 10 SCC 750 : [2019] 12 SCR 678; Vashdeo R. Bhojwani vs.

The following Order of the Court was passed: ORDER 1. The order of admission of their petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short “IBC”) passed by the National Company Law Tribunal (for short “NCLT”), having been reversed by the National Company Law Appellate Tribunal (for short “NCLAT”) on the ground that the application was barred by limitation, the Financial Creditor-Punjab National Bank has come up with the above appeal. 2. We have heard Shri Dhruv Mehta, learned senior counsel appearing for the appellant and Shri Rahul Totala, learned counsel appeari

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