TaxTMI 
TaxTMI 
2020 (2) TMI 699
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....der Section 7 of the I&B code was barred by limitation. 2. The Learned Counsel for the Appellant submitted that the 'Corporate Debtor' defaulted to pay the debt since 30th September, 2013 and the Respondent - Dena Bank classified the debt as NPA on 31st December, 2013. The date of default being 30th September, 2013 and the classification as NPA on 31st December, 2013, the application under Section 7 was barred by limitation. 3. The learned Counsel appearing on behalf of the Respondent-Dena Bank submitted that the application under Section 7 of the I&B Code is saved by Section 18 of the Limitation Act, 1963, in as much, even if the time, is taken from the date of default, i.e., 30th September, 2013, in view of the acknowledgement of liability given by the 'Corporate Debtor', the application filed by the Respondent cannot be termed as barred by time. 4. The learned Counsel for the Respondent contended that on 28th March, 2014, the 'Corporate Debtor' deposited two months' interest amounting to Rs. 111 lakhs. Subsequently, in its reply dated 5th January 2015 to the Demand Notice issued on 22nd December, 2014, the 'Corporate Debtor' sought restructuring of the debt. Infact, ....
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.... does not amount to acknowledgement of debt. There is nothing on record to suggest that the 'Corporate Debtor' or its authorized representative by its signature has accepted or acknowledged the debt within three years from the date of default or from the date when the account was declared NPA, i.e., on 31st December, 2013. The Balance Sheet of the 'Corporate Debtor' for the year 2016-2017 filed after 31st March, 2017 cannot be termed to be a document of acknowledgement in terms of Section 18 of the Limitation Act. 8. Any dues payable, even if acknowledged after three years of limitation period, cannot be taken into consideration for the purpose of deriving conclusion under Section 18 of the Limitation Act. 9. In the case of "Jignesh Shah and Another v. Union of India and Another─ (2019) SCC OnLine SC 1254", the Hon'ble Supreme Court noticed the provisions of Section 238A of the I&B Code and relevant provisions including Sections 7 and 9 of the I&B Code to decide the question of limitation. The Hon'ble Supreme Court observed and held as follows:-- "8. In paragraph 7 of the said judgment, the Report of the Insolvency Law Committee of March, 2018 was referred to a....
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.... exercise their remedy under existing laws within the prescribed limitation period, the Committee thought it fit to insert a specific section applying the Limitation Act to the Code. The relevant entry under the Limitation Act may be on a case to case basis. It was further noted that the Limitation Act may not apply to applications of corporate applicants, as these are initiated by the applicant for its own debts for the purpose of CIRP and are not in the form of a creditor's remedy." (emphasis supplied) The Hon'ble Supreme Court further noticed the arguments, observed and held: "13. Dr. Singhvi relied upon a number of judgments in which proceedings under Section 433 of the Companies Act, 1956 had been initiated after suits for recovery had already been filed. These judgments have held that the existence of such suit cannot be construed as having either revived a period of limitation or having extended it, insofar as the winding up proceeding was concerned. Thus, in Hariom Firestock Limited v. Sunjal Engineering Pvt. Ltd., (1999) 96 Comp Cas 349, a Single Judge of the Karnataka High Court, in the fact situation of a suit for recovery being filed pr....
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....fied, as provided in clause (b) of sub-section (1) of section 434. Therefore, since the debt of the petitioner-company has become time-barred and cannot be legally proved in this court in course of the present proceedings, winding up of opposite party No. 1 cannot be ordered due to non-payment of the said debt." 16. In Dr. Dipankar Chakraborty v. Allahabad Bank, 2017 SCC OnLine Cal 8742, the fact situation was that a suit had been filed by the petitioner in the City Court at Calcutta for damages against the Allahabad Bank. The Bank, in turn, filed a proceeding under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 in 2001 before the Debt Recovery Tribunal, Calcutta. The Civil Suit was also transferred to the Debt Recovery Tribunal, Calcutta where both proceedings were pending adjudication. Meanwhile, under the Securitisation and Restructure of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as the "SARFAESI Act"), a notice dated 3rd March, 2016 was issued under Section 13(2) of the SARFAESI Act. The question which arose before the Court was whether the invocation of the SARFAESI Act, being beyo....
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...., 2011, without there being an extension of the period of limitation by the act of the parties cannot be sustained. xxx xxx xxx 25. The issues raised are, therefore, answered by holding that, the initiation of the proceedings by the bank was barred by the laws of limitation on July 5, 2011 and all proceedings taken by the bank consequent upon and pursuant to the notice under Section 13(2) of the Act of 2002 dated July 5, 2011 are quashed including such notice." Finally the Hon'ble Supreme Court held: "21. The a....