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Issues: (i) Whether the petition was maintainable when the signatory filing the application was alleged to be unauthorised; (ii) Whether the financial debt was due and payable and the application was barred by limitation.
Issue (i): Whether the petition was maintainable when the signatory filing the application was alleged to be unauthorised.
Analysis: The application was signed by the officer shown as the bank's authorised representative, and the record also contained a separate authorisation issued by the competent officers for filing the application under section 7. Read together, these documents established authority to act for the financial creditor. A technical objection based on the form or description of the authority was not accepted.
Conclusion: The objection to maintainability on the ground of lack of authority failed, and the application was held to be validly filed.
Issue (ii): Whether the financial debt was due and payable and the application was barred by limitation.
Analysis: The contractual documents contemplated repayment after the commercial operation date, but they also treated breach of covenants, extraordinary circumstances, and material adverse events as events of default, with the consequence that the disbursed amount and interest would become due and payable. On the facts, the project had become impossible to implement and was treated as abandoned, bringing the default clauses into operation. On limitation, the financial statements and auditor's report recorded the outstanding borrowings and continuing default, which the Tribunal treated as acknowledgement of liability within the meaning of section 18 of the Limitation Act, 1963. The balance-sheet disclosure was treated as a continuing admission of debt and sufficient to extend limitation. The plea that SARFAESI action or non-disclosure of the creditor's name in the balance-sheet defeated the claim was rejected.
Conclusion: The debt was held to be due and payable, not barred by limitation, and the section 7 application was admitted.
Final Conclusion: Corporate insolvency resolution proceedings were directed to commence against the corporate debtor, with moratorium and appointment of an interim resolution professional following admission of the financial creditor's application.
Ratio Decidendi: An authorised bank officer may validly file a section 7 application when the record shows competent authorisation, and acknowledgment of a financial debt in the corporate debtor's financial statements before expiry of limitation extends time under section 18 of the Limitation Act, 1963 for purposes of insolvency proceedings.
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