2020 (9) TMI 582 - AT - Insolvency and Bankruptcy

Tribunal upholds Insolvency Code Section 7 application, dismisses appeal due to debt acknowledgments

Yogeshkumar Jashwantlal Thakkar Versus Indian Overseas Bank, Jason Dekor Pvt. Ltd.

Yogeshkumar Jashwantlal Thakkar Versus Indian Overseas Bank, Jason Dekor Pvt. Ltd. - TMI Issues Involved:1. Delay in filing the appeal.2. Admission of Section 7 application under the Insolvency and Bankruptcy Code (IBC).3. Applicability of the Limitation Act to the Section 7 application.4. Acknowledgement of debt and its implications on the period of limitation.5. Validity of documents and authority of the signatory.Issue-wise Detailed Analysis:1. Delay in Filing the Appeal:The Appellant sought condonation of a six-day delay in curing defects and filing the appeal. The delay was attributed to the time taken to obtain necessary documents and affidavits. The Tribunal, satisfied with the reasons provided, condoned the delay and disposed of the application.2. Admission of Section 7 Application Under IBC:The Appellant challenged the order of the National Company Law Tribunal (NCLT), Ahmedabad Bench, which admitted the Section 7 application filed by the 1st Respondent/Bank. The NCLT found the application complete and the Corporate Debtor in default of financial debt, thus fulfilling the requirements of Section 7 of the IBC.3. Applicability of the Limitation Act to the Section 7 Application:The Appellant argued that the Section 7 application was time-barred, as it was filed more than three years after the date of default (01.01.2016). The Appellant cited several Supreme Court judgments to support the contention that the application should be barred by limitation.4. Acknowledgement of Debt and Its Implications on the Period of Limitation:The Appellant contended that the balance confirmation and revival letters relied upon by the 1st Respondent/Bank were not placed before the Adjudicating Authority and lacked the Corporate Debtor's stamp. The Appellant also denied the execution of these acknowledgments. The 1st Respondent/Bank argued that the debt was acknowledged through various documents, extending the limitation period. The Tribunal noted that the balance confirmations and revival letters were valid and binding, thus extending the limitation period.5. Validity of Documents and Authority of the Signatory:The Appellant questioned the authority of the signatory of the Section 7 application. The Tribunal found that the application was signed by the Chief Manager of the 1st Respondent/Bank, who was duly authorized by the Board of Directors. The Tribunal held that the application was free from legal infirmity.Conclusion:The Tribunal concluded that the Section 7 application filed by the 1st Respondent/Bank was within the period of limitation due to the valid acknowledgments of debt. The appeal was dismissed, and the order of the Adjudicating Authority admitting the application and declaring moratorium was upheld. All connected interlocutory applications were closed, with no order as to costs.