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of <h1>Appeal allowed in insolvency case due to time limit expiration</h1> <h3>RAMDAS DUTTA SUSPENDED DIRECTOR OF D.P. AGRO MILLS PVT. LTD. Versus IDBI BANK LIMITED, MR. PANKAJ KUMAR TIBREWAL</h3> RAMDAS DUTTA SUSPENDED DIRECTOR OF D.P. AGRO MILLS PVT. LTD. Versus IDBI BANK LIMITED, MR. PANKAJ KUMAR TIBREWAL - TMI Issues Involved:1. Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is within the period of limitation.2. Whether the acknowledgment of debt extends the limitation period.Summary:Issue 1: Limitation Period for Filing Application under Section 7 of the CodeThe appeal was filed by the Suspended Director of the Corporate Debtor against the order admitting the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the IDBI Bank Limited. The Adjudicating Authority had allowed the application for the resolution of the defaulted amount and appointed an Interim Resolution Professional (IRP).The Bank filed the application on 01.11.2019 for the defaulted amount calculated as on 08.01.2019. The Bank had initially sanctioned a cash credit limit which was later enhanced. It issued a loan recall notice and invoked personal guarantees, subsequently taking recourse under the SARFAESI Act, 2002.The Bank did not mention the date of default in Part IV of Form 1, which is a mandatory requirement. The Adjudicating Authority allowed the Bank to file a supplementary affidavit to include the formal date of default and related documents. The supplementary affidavit stated the date of default as 30.06.2011.The Corporate Debtor contested the application on the ground of limitation, arguing that the application was filed beyond the period of limitation. The Adjudicating Authority concluded that the application was within limitation based on continuous acknowledgments in the balance sheets and the acceptance of the One Time Settlement (OTS) proposal.Issue 2: Acknowledgment of Debt and Extension of Limitation PeriodThe counsel for the Appellant argued that the limitation period should be counted from the date of default, which was 30.06.2011, and thus expired on 30.06.2014. The Adjudicating Authority had contradictory observations regarding the balance sheets and acknowledgments. The Appellant contended that there were no balance sheets for the years 2011, 2012, and 2013 to acknowledge the debt within the limitation period.The Respondent argued that the Appellant had admitted its liability in response to the notice issued under the SARFAESI Act and by accepting the OTS offer in January 2019.The Tribunal held that the limitation period for filing an application under Section 7 is three years from the date of default. The date of default was 30.06.2011, and the limitation expired on 30.06.2014. There was no acknowledgment of debt within this period to extend the limitation. The balance sheets provided were from 2015 onwards, and the OTS acceptance occurred beyond the limitation period.Conclusion:The Tribunal found that the application was filed beyond the period of limitation and there was no valid acknowledgment of debt to extend the limitation period. The appeal was allowed, and the impugned order was set aside. The IRP was advised to seek any other remedy available to him in accordance with the law.
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