TaxTMI 
TaxTMI 
2020 (6) TMI 660
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....peal. Parties are represented by their original status, represented in the Company Application, for the sake of convenience. 2. Brief facts of the case are as follows: The Financial Creditor, the Oriental Bank of Commerce had granted the term loan of Rs. 23,00,00,000/- (Rupees Twenty Three Crores only) to the 'Corporate Debtor' RDH Technologies Private Limited, vide sanction letter dated 17th April 2007. The Board of Director of the 'Corporate Debtor' by way of Resolution accepted the said term loan of Rs. 23,00,00,000/-(Rupees Twenty Three Crores only) and passed a Resolution to pledge the shares of 3 Companies M/s Gunwate Properties Private Limited, M/s Calcutta Nursing Private Limited and M/s Anurashi Commotrade Private Limited, held by the 'Corporate Debtor' as additional security to the bank to secure the overall credit limit of Rs. 23 crores. 3. The 'Corporate Debtor' had created equitable mortgage on the entire fixed assets by simply depositing the title deeds of the Company, together with Hightech building, proposed to be constructed therein at Plot No. F1, Block GP Electronics Complex, Sector V, Salt Lake City, Kolkata, with an area....
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....inancial Creditor is barred by limitation. The Adjudicating Authority rejected the objections of the 'Corporate Debtor' and admitted the Application filed under section 7 of I&B Code for initiation of CIRP against the 'Corporate Debtor' - RDH Technologies Private Limited, which is under-challenged this Appeal. The Appeal has been filed mainly on the ground that Adjudicating Authority erred in admitting the Application of the Respondent, even though no debt was payable in law. It is further contended that the alleged default was hopelessly barred by time and no right accrued in favour of the Respondent. The Adjudicating Authority has erred in admitted the application, in as much as, no debt is due and payable by the Appellant to the Respondent in law or fact. 6. We have heard the arguments of the Learned Counsel for the parties and perused the record. 7. On perusal of the impugned order, it appears that the plea of limitation was raised before the Adjudicating Authority. But the Adjudicating Authority had rejected the contention of the 'Corporate Debtor' and observed that: "From the Application and the documents placed on record by the Finan....
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....e Rs. 19,04,12,812.21 9. The account details submitted by the Financial Creditor - Bank itself slows that the account of the Corporate Debtor was declared NPA on 15th December 2012. The outstanding amount is shown as Rs. 7,54,68,438/-(Rupees seven crore fifty-four lacs sixty-eight thousand four hundred thirty-eight only)as shown in the remark column. It is stated that the acknowledgement of debt and security is Dt. 01st August 2017, relating to the guarantee about the account of M/s Bahubali Commercial Private Limited. It is also pertinent to mention that the account of companies M/s Bahubali Commercial Private Limited, M/s Rameshwaram Trexim Private Limited, M/s Safal Dealers Private Limited, M/s Gandhyanya Properties Private Limited and M/s Purshottam Trade Promotion Pvt. Ltd., for which the Corporate Debtor gave the guarantee, all of them defaulted in repaying the loan amount in the year 2010-11. The Learned Counsel for the Financial Creditor contends that (account of the Corporate Debtor was declared NPA on 15th December 2012) but after that, on several occasions, the corporate debtor acknowledged the liability, and the last acknowl....
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.... against whom such property or right is claimed, or by any person through whom he derives his title or liability, if the acknowledgement is made before the expiry of the period of limitation, then a fresh period of limitation shall be computed, from the time, when the acknowledgement was so signed. 11. Admittedly, in this case, the account of the Corporate Debtor was classified as NPA on 15th December 2012. The Financial Creditor has also admitted that date of default of the Corporate Debtor account is on 16th September 2012. Therefore, any acknowledgement of liability could only be made within a period of limitation; i.e. three years. 12. Hon'ble Supreme Court in case of Sagar Sharma v. Phoenix ARC (P.) Ltd. [2019]110 taxmann.com 50/156 SCL 707 has held that: "13. Admittedly, 'I&B Code' has come into force since 1-12-2016, therefore, the right to apply accrued to 1st Respondent on 1-12-2016. Therefore, we hold that the application under section 7 was not barred by limitation. 2. We had also made it clear beyond any doubt that for applications that will be filed under section 7 of the Code, Article 137 of the Limitation Act will apply. H....
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.... been made in writing signed by the party against whom such right is claimed, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. The explanation to the section provides that an acknowledgment may be sufficient though it omits to specify the exact nature of the right or avers that the time for payment has not yet come or is accompanied by a refusal to pay, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the right. Interpreting Section 19 of the Limitation Act, 1908 (corresponding to section 18 of the Limitation Act, 1963) this Court in Shapoor Freedom Mazda v. Durga Prosad Chamaria [AIR 1961 SC 1236] held: (AIR p. 1238, paras 6-7). "6. ... acknowledgment as prescribed by section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgment of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication. The statement on which a plea of acknowledgment is based must relate to a present subsisting liability though the exact nature or the specific character of the said liab....
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.... demand notice demanding payment of Rs. 1 lakh due under a promissory note executed by the debtor and the debtor sends a reply stating that he would pay the amount due, without mentioning the amount, it will still be an acknowledgment of liability. If a writing is relied on as an acknowledgment for extending the period of limitation in respect of the amount or right claimed in the suit, the acknowledgment should necessarily be in respect of the subject-matter of the suit. If a person executes a work and issues a demand letter making a claim for the amount due as per the final bill and the defendant agrees to verify the bill and pay the amount, the acknowledgment will save limitation for a suit for recovery of only such bill amount, but will not extend the limitation in regard to any fresh or additional claim for damages made in the suit, which was not a part of the bill or the demand letter. Again, we may illustrate. If a house is constructed under the item rate contract and the amount due in regard to work executed is Rs. two lakhs and certain part-payments say aggregating to Rs. 1,25,000 have been made and the contractor demands payment of the balance of Rs. 75,000 due towards th....
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....t of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or either by implication. The statement of which the plea of acknowledgement is based must relate to the present subsisting liability, though the exact nature of the specific character of the said liability may not be indicated in words. 19. Based on the above judgment in case of Khan Bahadur Shapoor Freedom Mazda (supra), J.C. Budhraja (supra) it is thus clear that before expiration of the period of limitation, acknowledgement of liability in writing, renews the debt but does not create a new right or action and it is also the Hon'ble Supreme Court, that by acknowledgement in writing a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. 20. The Learned Counsel for the Financial Creditor/Respondent relying on the above case law emphasized that in the present case, the account of the Corporate Debtor was classified as NPA on 15th December 2012. Therefore, as per article 137 of Limitation Act, limitation of three years, i.e. up to 14th December 2015 was available to file an application under section 7 or 9 I&B....
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....e Corporate Debtor acknowledgement and admitted correctness and debit balance due to the bank on 30th June 2017 amounting to Rs. 6,63,31,700.00. 25. By implication of section 18 of the Limitation Act, a fresh period of limitation of three years started from 01st August 2017 and this petition has been filed on 08th December 2018, which is within limitation. 26. It is pertinent to mention that the Corporate Debtor has also filed the certified copy of the bank statement with a certificate of the bank under Bankers Book of Evidence Act, 1891. On perusal of the bank relating to the loan account to the Corporate Debtor, it is clear that the Corporate Debtor made the part payment against the said loan on different dates as mentioned below: Sl. No. Date Amounts (Rs.) 1. 28-12-2013 1,25,000 2. 13-03-2015 10,00,000 3. 30-06-2015 50,00,000 4. 10-07-2015 68,00,000 5. 05-02-2016 10,00,000 6. 06-06-2016 19,00,000 7. 21-03-2017 39,40,000 8. 23-03-2017 30,00,000 9. 29-07-2017 99,000 Based on the above part payment in the loan account, it is clear that the Corporate Debtor-Financial Creditor made the ....
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.... the context in which section 60 appears, it is interesting to note that section 60 uses the phrase "actually due and payable to him...." whether its recovery is or is not barred by the limitation law. The expression "actually" makes it clear that in fact a debt must be due and payable notwithstanding the law of limitation. From this, it is very difficult to infer that in the context of the Contract Act, the expression "due and payable" by itself would connote an amount that may be due even though it is time-barred, for otherwise, it would be unnecessary for section 60 to contain the word "actually" together with the later words, "whether its recovery is or is not barred by the law in force for the time being as to the limitation of suits".------------------------ 22. Coming to the next argument that, in any case, section 238-A, being clarificatory of the law and being procedural in nature, must be held to be retrospective, it is necessary to refer to a few judgments of this Court. In M.P. Steel Corpn. v. CCE [M.P. Steel Corpn. v. CCE, (2015) 7 SCC 58: (2015) 3 SCC (Civ) 510], this Court held: (SCC pp. 97-101, paras 54-60) "54. It is settled law that periods of li....
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....aforesaid judgments correctly hold that a suit for recovery based upon a cause of action that is within limitation cannot in any manner impact the separate and independent remedy of a winding-up proceeding. In law, when time begins to run, it can only be extended in the manner provided in the Limitation Act. For example, an acknowledgment of liability under section 18 of the Limitation Act would certainly extend the limitation period, but a suit for recovery, which is a separate and independent proceeding distinct from the remedy of winding up would, in no manner, impact the limitation within which the winding-up proceeding is to be filed, by somehow keeping the debt alive for the purpose of the winding-up proceeding.' 28. Thus in the case mentioned above, the Hon'ble Supreme Court has held that the limitation can only be extended in the manner provided in the Limitation Act. For example, an acknowledgement of liability under section 18 of the Limitation Act would certainly extend the limitation period. 29. In this case, it is clear that on the day of filing the petition U/S 7 of the Code, there was a subsisting liability on the corporate debtor, and due to the acknow....
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.... पà¥à¤·à¥à¤Ÿà¤¿, अà¤à¤¿à¤¸à¥à¤µà¥€à¤•à¥ƒà¤¤à¤¿ और सà¥à¤µà¥€à¤•à¥ƒà¤¤à¤¿ करता हूठकरते हैं:- We, hereby confirm, acknowledge and admit the conestness of toe debit balance due to the bank in the following loan accounts- उधार सà¥à¤µà¤¿à¤§à¤¾ की पà¥à¤°à¤•à¥ƒà¤¤à¤¿/उधार खाते का नाम Nature of loan facility/Name of loan account Torm boan की बकाया की तारीख पà¥à¤°à¤¤à¤¿à¤à¥‚ति को पर वारà¥à¤·à¤¿à¤• बà¥à¤¯à¤¾à¤œ दर Rate of interest Security बाप डेटि पà¥à¤°à¤¤à¤¿à¤¶à¥‡à¤· Debit palance outstanding as on 20.06.20 per annum with only rests as on date....
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....tified True Copy Go BAKH OF दसà¥à¤¤à¤¾à¤µà¥‡à¤œà¥‹à¤‚ की तारीख/Date of document(s) 318 10:44 मैं/हम लेखा विवरण और याज के वà¥à¤¯à¤¥à¤¾.. ..जो बकाया डेविट अतिशेष की तारीख तक कà¥à¤°à¥‡à¤¡à¤¿à¤Ÿ सà¥à¤µà¤¿à¤§à¤¾/उधार खाते में बैंक दà¥à¤µà¤¾à¤°à¤¾ पà¥à¤°à¤à¤¾à¤°à¤¿à¤¤ अनà¥à¤¯ पà¥à¤°à¤à¤¾à¤°à¥‹à¤‚ के मेरे पà¥à¤°à¤¾à¤ªà¥à¤¤ करने की पà¥à¤·à¥à¤Ÿà¤¿ और अà¤à¤¿à¤¸à¥à¤µà¥€à¤•à¥ƒà¤¤à¤¿ à¤à¥€ करता हूà¤....
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....र खाते/सà¥à¤µà¤¿à¤§à¤¾ के समà¥à¤¬à¤¦à¥à¤§ या उस पर आधारित किसी मà¥à¤•à¤¦à¤¨à¥‡ में पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ करने का आगà¥à¤°à¤¹ और/या मांग नहीं करूंगा/करेंगे We further confirm and acknowledge having received the statement of account(s) and details of interest/ and other charges, charged by the bank in the credit facilities/loan account(s) upto the date of debit balance onstanding as on. We confirm that IWe have gone through and checked the complete statement of accounts) of the above mentioned loan accounts) received upto the date of debit balance mentioned above. Iwe shall not challenge or question or dispute the correctness of the said figure(s)/amounts) and shan also not insist and or demand for production of and statement of account(s)....