2020 (8) TMI 395

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....Bankruptcy Code, 2016' ('I&B Code') against 'Xylon Electrotechnic Pvt. Ltd.' (Corporate Debtor) for having committed default to repay the outstanding amount of Rs. 54,49,40,510.35 came to be dismissed in terms of the impugned order dated 28th May, 2020 passed by the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench on the ground that the claim in respect of the 'financial debt' was barred by limitation and the Applicant/Appellant had not submitted any proof of continuous acknowledgement of debts by the Corporate Debtor. Aggrieved thereof the Appellant (Financial Creditor) has filed the instant appeal assailing the impugned order on the ground that the debt was payable in law as the same had been acknowledged by the 'Co....

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....r's account was classified as NPA. Admittedly, no acknowledgement has been made in writing by the Corporate Debtor before the expiry of the period of three years reckoned from such date so as to extend the period of limitation. It is by now well settled that the application under Section 7 of the I&B Code is governed by Article 137 of the Limitation Act and any application filed by the 'Financial Creditor' for imitation of the 'corporate insolvency resolution process' beyond three years from the date of the Corporate Debtor's account being classified as Non-Performing Account would be barred by limitation. It having been found that there is no acknowledgement in writing on the part of the Respondent (Corporate Debtor) before the expiry of p....

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....bunal make it clear that for the purpose of computing the period of limitation of application under Section 7, the date of default is 'NPA' and hence a crucial date. 15. A suit for recovery of money can be filed only when there is a default of dues. Even if the decree is passed, the date of default does not shift forward to the date of decree or date of payment for execution. Decree can be executed within specified period i.e. 12 years. If it is executable within the period of limitation, one cannot allege that there is a default of decree or payment of dues. 16. Therefore, we hold that a Judgment or a decree passed by a Court for recovery of money by Civil Court/ Debt Recovery Tribunal cannot shift forward the date of default for the....

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....of a remedy under the 'SARFAESI Act, 2002 or in a recovery proceedings before the DRT. The date of default computed with effect from the date of account of the 'Corporate Debtor' being classified as NPA would not shift as in the instant case proceedings taken before the DRT for recovery of the 'financial debt' would not be a proceeding being pursued before a wrong forum nor would that be a continuation of the cause of action. As regard the issue raised by the Appellant in regard to reflection of the 'financial debt' in the balance-sheet of the 'Corporate Debtor' for the relevant period amounting to acknowledgement of liability, it would suffice to refer to the following observations made in majority judgment of the four Member Bench of this....