TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 396
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....,63,35,337.31/- is due and outstanding. The present petition being filed in January 2019 is within limitation, being within three years from the date of the cause of action. Further even though an attempt was made on the part of the Corporate debtor to project certain inconsistencies in relation to claim amounts, however it is seen that the amount in default in excess of Rs. 1,00,000/- being the minimum threshold limit fixed under IBC, 2016. Considering the circumstances this Tribunal is inclined to admit this petition and initiate CIRP of the Respondent. Accordingly, this petition is admitted." 3. The Learned Counsel for the Appellant submits that the 1st Respondent /Bank sanctioned various facilities which was extended from time to time to the 'Corporate Debtor' and the facility was lastly sanctioned on 07.02.2014 and later on 05.03.2014. As a matter of fact, the term loan I & II was taken over from Punjab National Bank. 4. The Learned Counsel for the Appellants brings to the notice of this Tribunal that the 1st Respondent / Appellant/Bank on 07.02.2014 had sanctioned a sum of Rs. 2036.00 Lakhs on certain terms and conditions. However, based on the request of the 'Corporate D....
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.... letter dated 12.12.2018 of the 'Corporate Debtor' to revive the period of limitation. 10. Advancing his argument, the learned Counsel for the Appellants contends that the period of limitation in the present case was calculated from the date of One Time Settlement letter dated 12.12.2018, to show the 'acknowledgement of liability' and viewed in that perspective the Adjudicating Authority had admitted the application. 11. Expatiating his submission, the Learned Counsel for the Appellants forcefully takes a stand that the application filed by the 1st Respondent/Bank (Financial Creditor) before the Adjudicating Authority is barred by limitation because of the fact that in an application u/s 7 of 'I&B' Code, the (limitation) period is to be computed as per Article 137 of Limitation Act, 1963. 12. The Learned Counsel for the Appellants contends that "the right to sue" emanates when a default occurs and the Section 7 application filed by the 1st Respondent/Bank is barred under Article 137 of Limitation Act, 1963, for the simple reason that the date of default was 30.09.2015(date of declaration of account as NPA) whereas the application was filed on 30.01.2019 viz. three years after th....
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....India) Ltd. and Another (Civil Appeal No. 4952/2019;SC) had observed that an application u/s 7 of 'I&B' Code would fall only within the residuary Article 137 of Limitation Act. 17. The Learned Counsel for the Appellants cites the decision of Hon'ble Supreme Court in Vashdeo R Bhojwani Vs. Abhyudaya Co Operative Bank Ltd. (Supreme Court; Civil Appeal No. 11020/2018 wherein it is observed that the right to sue accrues when a default occurs. If the default had occurred over three years prior to the date of filing of application, the application would be barred under Article 137 of Limitation Act. 18. The Learned Counsel for the Appellants refers to the decision in Anil Partap Singh Chauhan Vs. OnidaSavak Ltd. (AIR 2003 Delhi 252) wherein it is held plaintiff is not entitled to the benefit of exclusion of time during which the winding up petition pending for computing the limitations of the suits instituted by the plaintiff etc. 19. The Learned Counsel for the Appellant points out the decision of this Tribunal in V Hotels Limited vs. Asset Reconstruction Company(India) Limited (NCLAT); Company Appeal (AT) (Insolvency) No. 525 of 2019 wherein it is held that there is no continuous ca....
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....ite and future interest @ 13% p.a. compounded at monthly rests + levy of penalty @ 3% p.m. thereafter from the date of filing of original application till its realisation etc. 25. The Learned Counsel for the Respondent / Bank submits that after passing of the decree in OA No. 576/2016 by Debt Recovery Tribunal, Delhi, the 'Corporate Debtor' filed a counter claim in OA 576/2016 as Section 19(8) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 claiming damages and less of profit on the basis of non-restructuring dues of 'Corporate Debtor'. The Learned Counsel for the 1st Respondent contends that on 13.02.2017 a fresh notice u/s 13(2) of the SARFAESI Act was issued by the 1st Respondent to which 'Corporate Debtor' submitted its reply dated 09.08.2018 without denying its liability. 26. The Learned Counsel for the 1st Respondent points out that during the pendency of the Recovery proceedings before the Debt Recovery Tribunal, Delhi the 'Corporate Debtor' viz. Kew Precision Parts Private Limited again approached the 1st Respondent / Bank for settlement of its dues and submitted another proposal on 12.12.2018 wherein it was mentioned by the Managing Director of....
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....assets of the 'Corporate Debtor' secured with the Bank under SARFAESI Act, 2002 in once but twice u/s 13(2) of the Act firstly on 19.11.2015 and subsequently on 13.12.2017 prior to the filing of the application before the learned Adjudicating Authority and in fact concealed the information to be shared under Part V subheading 2 of the application. 31. The grievance of the Appellant is that the 1st Respondent /Bank had supressed the fact of SARFAESI proceedings initiated against the 'Corporate Debtor' before the Debt Recovery Tribunal, Lucknow and the same was not disclosed in the original application filed before the Debt Recovery Tribunal, New Delhi nor before the Learned Adjudicating Authority. It is also represented on behalf of the Appellants that the 1st Respondent / Bank had initiated recovery proceedings against the 'Corporate Debtor' on the one hand and on the other hand had initiated 'Corporate Insolvency Resolution Process' against the Company. 32. The 'Corporate Debtor' / Company had also averred in it Reply before the Learned Adjudicating Authority that the settlement of Account of the Company would show that the account was never out of order and why the 1st Responde....
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....rovisions of SARFAESI Act, 2002 and Rules made thereunder. 36. As per Section 2(j) of SARFAESI Act, 2002 'default' means non-payment of any principal debt or interest thereon or any other amount payable by a borrower to any secured creditor consequent upon which the account of such borrower is classified as 'Non performing asset' (NPA) in the books of account of a secured creditor. 37. Section 2(1)(ZF) of the SARFAESI Act defines the term 'Security Interest'. Section 2(1)(n) of the Act defines hypothecation. However, Section 58 of the Transfer of Property Act, 1882 defines mortgage and there are six types of mortgages mentioned therein. 38. It must be borne in mind and Article 62 of the Limitation Act, 1963 relates to enforcing the payment of money procured by mortgaged or otherwise charged upon the immoveable property. A suit to enforce a mortgage is governed by Article 62 and has to be filed within 12 years from the date when the money became due unless the limitation period prescribed was extended under any other provision of the Limitation Act. Article 137 of the Limitation Act constitutes the residuary article as regards the application. To put it succinctly, Article 113 pe....
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....hin time. Further, the acknowledgement does not create any new right and it only extends the limitation period as per decision P.Sreedevi Vs. P.Appu AIR 1991 Ker page - 76. 43. It may not be out of place for this Tribunal to make pertinent mention that when a party claiming benefit of Section 14 of the Limitation Act, 1963 failed to secure relief in earlier proceeding not because of any defect in jurisdiction or some other cause of like nature, he cannot derive the benefit u/s 14 of the Limitation Act as per decision Z.Khan Vs. Board of Revenue, 1984 ALL LJ. However, in the decision 'Ajob Enterprises' V. Jayant Vegoiles & Chemicals AIR 1991, Bombay at page 35 it is held that the time taken to prosecute suit against the Company for recovery of debt, such proceedings cannot be excluded in calculating the limitation period because the matter in issue in suit and winding up proceedings is not the same. 44. In the decision Yashant Vs. Walchand reported in AIR 1951 Supreme Court page 16, the Hon.Supreme Court had observed that the time consumed in insolvency proceedings cannot be excluded u/s 14 of the Limitation Act for filing the execution case on the basis of money decree obtained a....
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....ncy of either SA 250/2016 or the OA No. 576/16 does not bar the filing of an application under 'I&B' for initiation of 'Corporate Insolvency Resolution Process' by an aggrieved person. 47. In regard to the plea of the 1st Respondent/Bank that on 26.03.2016, a complaint was made by the 'Corporate Debtor' against the Bank for not rejecting their debts and in the said letter there was an admission of debt liability, it is to be pointed out that the same cannot come to the rescue of the Bank because of the fact that the debt of non-payment of dues by the 'Corporate Debtor' took place in June, 2015 and Section 7 application was filed by the 1st Respondent / Bank before the Adjudicating Authority on 30.01.2019 which is beyond the period of limitation as enshrined in Article 137 of the Limitation Act. Also that in the decision Kalpana Trading Co. Vs. Executive Officer Town Panchayat AIR 1999 Mad37, it is observed that just sending a letter to the higher authorities to settle the issues does not amount to an 'Acknowledgement'. 48. As a matter of fact, and that on 9.10.15 the loan was recalled by the Bank. The 'One Time Settlement' proposal given by the 'Corporate Debtor' dated 12.12.201....