TaxTMI 
TaxTMI 
2020 (8) TMI 537
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....cess' against RNA Corp. Pvt. Ltd. ('Corporate Debtor'), who was the Guarantor. 2. The Appellant has challenged the impugned order on these grounds: - (i) The Application under Section 7 of the I&B Code was barred by limitation; and (ii) Bank of India has already moved second Application under Section 7 of the I&B Code for the same set of claim against Chamber Constructions Pvt. Ltd., Guarantor ('Corporate Debtor' herein) and is not maintainable. 3. It is desirable to state the facts with regard to Bank of India ('Financial Creditor'), as pleaded and recorded by Adjudicating Authority (National Company Law Tribunal), as under: - "3. The counsel for the petitioner submits that a Corporate Term Loan of Rs. 75,00,00,000/- was granted to the Corporate Debtor vide Sanction Letter dated 24/10/2013. The said amount was also disbursed by them in favour of the Corporate Debtor. The counsel for the petitioner mentioned that there was Deed of Guarantee entered into dated 29th October, 2013 and 9th December, 2013. There were also registered mortgage deeds dated 29th October 2013, 10th December 2013 and 16th December 2013. 4. The counsel for the petition....
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....on 5 of the Limitation Act may be applied to condone the delay in filing such application." Dealing with Section 23 of the Limitation Act, 1963, the Hon'ble Supreme Court observed: "xxx xxx xxx Following this judgment, it is clear that when the recovery certificate dated 24-12-2001 was issued, this certificate injured effectively and completely the appellant's rights as a result of which limitation would have begun ticking" 8. In "Jignesh Shah and another vs. Union of India and another - (2019) 10 SCC 750", the Hon'ble Supreme Court taking into consideration the fact of filing of an Application under Sections 433 and 434 of the Companies Act, 2013 observed as follows: "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 Ltd. v. Sunjal Engg. (P) Ltd., a Single Judge of the Karnataka High C....
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....decree remaining unsatisfied, 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 1 cannot be ordered due to non-payment of the said debt." Finally, the Hon'ble Supreme Court after taking into consideration the date of default observed as follows: - "21. The 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. ....
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....itation. For proper appreciation, it is better to note the facts of the judgment as follows: - "In the present case, Respondent 2 was declared NPA on 21-7-2011. At that point of time, State Bank of India filed two OAs in the Debts Recovery Tribunal in 2012 in order to recover a total debt of 50 crores of rupees. In the meanwhile, by an assignment dated 28-3-2014, State Bank of India assigned the aforesaid debt to Respondent 1. The Debts Recovery Tribunal proceedings reached judgment on 10-6-2016, the Tribunal holding that the OAs filed before it were not maintainable for the reasons given therein. 2. As against the aforesaid judgment, Special Civil Application Nos. 10621-622 were filed before the Gujarat High Court which resulted in the High Court remanding the aforesaid matter. From this order, a special leave petition was dismissed on 27-3-2017. 3. An independent proceeding was then begun by Respondent 1 on 3-10-2017 being in the form of a Section 7 application filed under the Insolvency and Bankruptcy Code in order to recover the original debt together with interest which now amounted to about 124 crores of rupees. In Form-I that has statut....
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....ould fall only within the residuary Article 137. As rightly pointed out by the learned counsel appearing on behalf of the appellant, time, therefore, begins to run on 21-7-2011, as a result of which the application filed under Section 7 would clearly be time-barred. So far as Mr Banerjee's reliance on para 11 of B.K. Educational Services (P) Ltd., suffice it to say that the Report of the Insolvency Law Committee itself stated that the intent of the Code could not have been to give a new lease of life to debts which are already time-barred. 7. This being the case, we fail to see how this para could possibly help the case of the respondents. Further, it is not for us to interpret, commercially or otherwise, articles of the Limitation Act when it is clear that a particular article gets attracted. It is well settled that there is no equity about limitation - judgments have stated that often time periods provided by the Limitation Act can be arbitrary in nature. 8. This being the case, the appeal is allowed and the judgments of the NCLT and NCLAT are set aside." 10. Normally, the period of limitation is to be counted from the date of default/ NPA. However, the d....
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....e to state that we are not willful defaulters and we have every intention to repay every paise borrowed from your bank. The reasons why we have not been able to make timely payments have been conveyed to you time and again through various letters. The same is due to circumstances beyond our control, the adverse economic scenario of the country and globally, which is very well known to everybody. You are very well aware that the real estate market has been hit by a slowdown since 2008. Subsequently, to make matters worse, the construction of projects slowed as the Government initiated changes in the real estate guidelines. There were hardly any approvals coming and/ or construction happening in the city for almost 4 years, from 2010-11 onwards. However, despite all the severe challenges, which badly blocked the flow of funds, we have made payments to you to the best of our abilities. An amount of Rs. 5 crores was paid to you between December 2015 and January 2016. We would also like to place on record that we had, vide our letter dated 5th May 2015, informed you that we had another bank willing to take over a significant part of our debt subject to you granting a c....
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....a willful defaulter. We would like place on record that we have a very good reputation and goodwill which we have managed to create after many years of hard work. It is this reputation and goodwill that has enabled us to make payments to you, time and again, despite the severe slowdown in the real estate market and despite the fact that you have taken possession of the secured assets. This also is effectively preventing us from developing the secured real estate and raising funds, to repay you. We are really concerned by your threat to publish the photographs of the promoters and have been advised legal recourse (defamation/ loss of reputation and direct/ losses on account of it; civil or criminal), to stop any attempt in this regard (to malign or tarnish image/ reputation/ goodwill). Further, your action would also jeopardize our efforts to raise further funds through sale, etc. However, considering what has been mentioned herein, our relationship, etc. we are sure you will not let us down and infact continue to provide your support in helping us to regularize your account at the earliest. We are again reiterating that we are not only have all intention but are also makin....