2019 (10) TMI 1267

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....creditor and corporate debtor entered into an agreement on 6/8/2014 whereby financial creditor agreed to grant Rs. 2 crore investment as ICD which carry interest @ 16% and were payable on 30/9/2014. Corporate debtor provided PDC and Demand Promissory Note also, hence, this petition. 3. Ld. Counsel appearing on behalf of the financial creditor after narrating the basic facts drew our attention to letters placed at page 29 to 37 which also contend copies of debt notes for the interest payable by the corporate debtor to show that the claim was not time barred. He, in particular, drew our attention to communication dated 29/ 1/2018 and 30/7/2018 which were request letters from the side of the corporate debtor to confirm the outstanding balance of ICD as on 31/ 12/2017 and 30/6/2018 to the auditors of the corporate debtor. 4. Ld. Counsel for the corporate debtor contended that acknowledgment were not in compliance to provision of Sec. 18 of the Limitation Act, 1963, hence, not admissible and consequently, debt was time barred. The contention regarding restructuring and other issues between the financial creditor and corporate debtor in relation thereto were also mentioned but in our o....

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....or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;  (b) The word "signed" means signed either personally or by a agent duly authorised in this behalf; and  (c) An application for the execution of a decree or order, shall n t be deemed to be an application in respect of any property or right." om perusal of the explanation (a) to the said section it can safely be concluded that such letters constitute acknowledgment of debt by the corporate debtor, s it is not necessary that the letter should be written to the financial creditor only. It is further noteworthy that explanation (a) takes into its ambit the generally accepted commercial practices of communication between the parties hereby acknowledgment of debt can be inferred as no specific format has been prescribed. 6. Having stated so, a question may arise that such communications are in respect of the debt outstanding in the books of account of corporate debtor as on 31/12/2017 and 30/6/2018 and have been sent on 29/ 1/2018 and 30/7/2 18 res....

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.... or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be. " 9. Before looking into the ambit and scope of this section, it is stated that this provision was incorporated in Insolvency & Bankruptcy Code, 2016 with that stale claims cannot be made alive through the mechanism of Insolvency & Bankruptcy Code, 2016. This is also so because Insolvency & Bankruptcy Code, 2016 is not a recovery mechanism rather a comprehensive code for insolvency resolution old and stale claims cannot be considered as a source or detecting of signs impending insolvency at an early stage. Hence, for this reason also the necessity was felt to make provision of Limitation Act, 1963 applicable to Insolvency & Bankruptcy Code, 2016. It has been settled judicially that Sec.238A is applicable since the implication of Insolvency & Bankruptcy Code, 2016. It is evident that Sec.238A the word "as far as may be" have been used which means that the provisions of Limitation Act, 1963 would apply to the extent possible and any provision of Limitation Act, 1963 being inconsistent to the provisions o....

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....oceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. v. The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during moratorium period. vi. The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. vii. The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolut....