State Bank of India vs Krishidhan Seeds Private Limited

Court

Supreme Court of India

Date

18 April 2022

Case No.

Civil Appeal No. 910 of 2021

Result

Allowed

Bench

D.Y. Chandrachud, Surya Kant

Citation

[2022] 2 S.C.R. 1155 : 2022 INSC 428

Headnote

Insolvency and Bankruptcy Code 2016 – s.7 – Limitation Act, 1963 – s.18 – Applicability of – Default, acknowledgment in balance sheet of company – Proceedings under IBC – Limitation – Appellant filed application for initiation of Corporate Insolvency Resolution Process (CIRP) on the ground that the respondent defaulted in paying the financial debt – Date of default was mentioned as 10.06.14, when the respondent’s account was declared as a Non-Performing Asset (NPA) – Application rejected by NCLT on ground of limitation observing that the account was declared an NPA on 10.06.14, while the proceeding u/s.7 was instituted on 19.09.18, beyond three years from the date on which the right to apply accrued – Order upheld by NCLAT– On appeal, held: Judgment of NCLAT in V Padmakumar v. Stressed Assets Stabilisation Fund and Another which was relied on by NCLT has been overruled by a three-Judge Bench judgment of Supreme Court in Asset Reconstruction Company (India) Limited v Bishal Jaiswal and Anr.–An acknowledgment in a balance sheet without a qualification can be relied upon for the purpose of the proceedings under the IBC so long as the acknowledgment was within a period of three years from the original date of default – Provisions of s.18, Limitation Act are not alien to and are applicable to proceedings under the IBC – However, in the present case since proceedings are being restored back to NCLT for afresh adjudication in view of decisions of Supreme Court, the factual dispute on whether the application filed u/s.7 of the IBC would result in an initiation of the CIRP is not being entered upon – Order of NCLAT and NCLT set aside – All rights and contentions of the parties left open on the factual aspects, to be adjudicated upon before the NCLT. Asset Reconstruction Company (India) Limited v Bishal Jaiswal and Another (2021) 6 SCC 366; Laxmi Pat Surana v Union Bank of India and Another (2021) 8 SCC 481; Rajendra Narottamdas Sheth and Another v Chandra Prakash Jain and Another 2021 SCC OnLine SC 843 – relied on.

The following Order of the Court was passed: ORDER 1. The National Company Law Tribunal1, by its judgment dated 16 September 2020, rejected the application dated 19 September 2018 2 filed by the State Bank of India, the appellant, under Section 7 of the Insolvency and Bankruptcy Code 20163 against the respondent, the alleged Corporate Debtor, for initiation of the Corporate Insolvency Resolution Process4. 2. The respondent received credit facilities from the appellant commencing from 30 November 2006. According to the appellant, as on 24 June 2013, the outstanding under the credit facilit

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