TaxTMI 
TaxTMI 
2020 (9) TMI 582
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..../ Applicant, in obtaining the Documents / Affidavits required for finalisation of the Appeal. On being subjectively satisfied as to the reasons ascribed on behalf of the Appellant / Applicant, this Tribunal, condones the delay of six days in furtherance of substantial cause of justice and accordingly the IA No. 612/2020 stands disposed of. 2. The Appellant/Suspended Director of 2nd Respondent has filed the present Appeal being aggrieved against the impugned order passed by the Adjudicating Authority passed by the ('National Company Law Tribunal, Ahmedabad Bench) in admitting the Section 7 Application of the 'I&B' Code filed by the 1st Respondent / Bank. 3. The Adjudicating Authority while passing the impugned order C.P. No. (IB) 257/7/NCLT/AHM/2019] at paragraph 16 and 17 had observed the following: - "16. In the instant application, from the material placed on record by the applicant, this authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the financial debt to the applicant and the Respondent Company has acknowledged the debt. 17. In the instant case, the documents produced by the fin....
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....03.2017 did not bear stamp/seal of the 'Corporate Debtor', to wriggle out of it, new debit confirmation letter dated 31.03.2017 was placed bearing the stamp of 'Corporate Debtor' and further that it is unusual for the 1st Respondent / Bank to obtain two 'Debit Confirmation Letters' etc. and in this backdrop, the Acknowledgements' are not established and they are of no avail to the 1st Respondent / Bank. 9. The Learned Counsel for the Appellant refers to the judgement of Hon'ble Supreme Court in 'Babulal Vardharji Gurjar' V. 'Veer Gurjar Aluminium Industries Pvt. Ltd. and Anr.' (Civil Appeal no. 6357 of 2019 - decided on 14.08.2020) and submits that an 'Acknowledgement' cannot revive default in insolvency proceedings under IBC regime and can only revive limitation for 'cause of action'. 10. The Learned Counsel for the Appellant cites the following decisions of Hon'ble Supreme Court: - (i) In the decision 'Vashdeo R.Bhojwani' V. 'Abhyudaya Co- Operative Bank Limited and Anr.' (2019) 9 Supreme Court Cases at page 158 at special page 159 and 160 wherein at paragraph 4 it is observed as under:- "4. In order to get out of the clutches of para 27, it is urged that ....
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....und that it would apply to suits. The present case being 'an application' which is filed u/s 7 would 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 21.07.2011, 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. (2019) 11 SCC 633, suffice it to say that the Report of the Insolvency Law Committee itself stated that the intent of the court could not have been to give a new lease of life to debts which are already time-barred." (iii) In the decision Sagar Sharma and Another V. Phoenix ARC Private Limited and Another (2019) 10 Supreme Court Cases at page 353 at special page 354 wherein at paragraph 2 to 4 it is observed as under: - "2. We had also made it clear beyond doubt that for applications that will be filed under section 7 of the Code Article 137 of the Limitation Act will apply. However, we find in the impugned judgement (Sagar Sharma V. Phoenix ARC (P) Ltd., 2019 SCC online NCLAT 617) that article 62 (erroneously stated to be art....
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.... only for the purpose of appointing an officer in the court as official liquidator in order to manage the day-today affairs and otherwise secure and Company Appeal (AT) (Insolvency) No. 236 of 2020 12 safeguard the assets of the respondent Company. 38. We therefore allow civil Appeal (Diary No. 16521 of 2019) and disposed of writ petition (civil) No. 455 of 2019 by holding that the winding up petition filed on 21.10.2016 being beyond the period of three years mentioned in Article 137 of the Limitation Act is time barred and therefore cannot be proceeded with any further. Accordingly, the impugned judgement of the NCLAT (Pushpa Shah v. IL&FS Financial Services Ltd; 2019 SCC online NCLAT 572) and the judgement of the NCLT (IL&FS Financial Services Ltd. v. La-Fin Financial Services (P) Ltd. (2018)SCC online NCLT 11437) are set aside." 11. The Learned Counsel for the Appellant refers to the decision of Hon'ble Supreme Court in 'Babulal Vardharji Gurjar' V. 'Veer Gurjar Aluminium Industries Pvt. Ltd. and Anr.' (Civil Appeal no. 6357 of 2019) wherein at paragraphs 11, 13.1, 13.6 and para 31 to 33 wherein it is observed as under: - "11..........it could be reasonably ....
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.... the proposal for OTS, if at all made on 31.07.2018, cannot revive the date of default as per declaration of NPA on 08.07.2011 nor does it attract Section 18 of the Limitation Act. 31. While the aforesaid principles remain crystal clear with the consistent decisions of this Court, the only area of dispute, around which the contentions of learned counsel for the parties have Company Appeal (AT) (Insolvency) No. 236 of 2020 16 revolved in the present case, is about applicability of Section 18 of the Limitation Act and effect of the observations occurring in paragraph 21 of the decision in Jignesh Shah (supra). 32. We have noticed all the relevant and material observations and enunciations in the case of Jignesh Shah hereinbefore. Prima facie, it appears that illustrative reference to Section 18 of the Limitation Act, in paragraph 21 of the decision in Jignesh Shah, had only been in relation to the suit or other proceedings, wherever it could apply and where the period of limitation could get extended because of acknowledgement of liability. Noticeably, in contradistinction to the proceeding of a suit, this Court observed that a suit for recovery, which is a separate....
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....submits that in the present case, even though the 'Default' on the part of the 2nd Respondent / 'Corporate Debtor' took place on 01.01.2016, in part V of Section 7 Application filed before the Adjudicating Authority by the 1st Respondent / Bank make it clear that there existed an acknowledgement on the part of the 'Corporate Debtor' (vide page 53 of the paper book) and further that the execution of numerous 'Revival Letters' dated 31.03.2015, 30.04.2015 and 31.03.2017 unerringly point out that the Debt was duly acknowledged by the 'corporate Debtor' to the 1st Respondent / Bank for the purpose of Section 18 of the Limitation Act, 1963. Moreover, it is the stand of the 1st Respondent / Bank that several Debit Confirmation Letters dated 02.04.2013, 14.10.2013, 15.10.2013, 30.09.2014, 20.05.2015, 05.06.2015, 02.09.2016 and 31.03.2017 clearly exhibited that debt due and payable to the 1st Respondent / Bank was confirmed and there existed a continuous cause of action' in favour of the Bank to lay its claim, as the acknowledgement of debt' was made before the expiration of the limitation period, calculated from the date of default i.e. 01.01.2016. In fact, the said legal position is affi....
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....e of action' and gave rise to fresh limitation period in favour of the Bank. 17. The Learned Counsel for the 1st Respondent / Bank contends that the judgement of the Hon'ble Supreme Court in 'Babulal Vardharji Gurjar' V. 'Veer Gurjar Aluminium Industries Pvt. Ltd. and Anr.' is inapplicable to the facts of the instant case. In short it is the submission of the Learned Counsel for the 1st Respondent / Bank that the facts of the present appeal are clearly supported with relevant materials and acknowledgement duly signed / stamped / executed by the Directors of the 'Corporate Debtor'. 18. The Learned Counsel for the 1st Respondent / Bank refers to the decision of Hon'ble Supreme Court in 'Mobilox Innovations P. Ltd.' v. 'Kirusa Software (P) Ltd.,' 2018 1 SCC at page 353 wherein it is observed that if the Learned Adjudicating Authority is satisfied on the perusal of evidence produced by the 'Financial creditor' that at default has occurred and the debt is due, then the application filed u/s 7 of the code is to be admitted, unless the contrary is proved. 19. This Tribunal has heard the Learned Counsels appearing for the parties and noticed their contentions. 20. It is to be p....
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....fore, it is quite clear that the application filed u/s 7 of the 'I&B' Code by the 1st Respondent / Bank before the Adjudicating Authority is free from any legal infirmity, as opined by this Tribunal. 23. It is to be pertinently pointed out that in the decision of Hon'ble Supreme Court 'Sampuran Singh' V. Naranjan Singh' AIR 1999 SC at page 1047 at special page 1050 it is observed that Section 18 of sub-section (1) starts with the words 'where, before the expiration of the prescribed period for a suit or application in respect of any property or right and acknowledgement of liability in respect of such property or right has been made'. 24. Apart from that, in the decision of Hon'ble Supreme Court 'J.C. Bhudharaja' V. 'Orissa Mining Corporation Ltd.', reported in 2008 2 SCC at page 444 it is observed that 'mere acknowledgement of the liability in respect of the right in question, it need not be accompanied by a promise to pay either express or even by implication the statement on which a plea of acknowledgement is based must relate to a present subsisting liability though the exact nature of specific character of said liability may not be indicated in words'. 25. In the deci....
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....ment of any right thereof - (Clauses (iii) to (vi) are not relevant hence omitted). Unfortunately, the assessee did not bring on record the necessary material fact to establish that he became owner by any non-testamentary instrument acquiring right, title and interests in the plant and machinery nor the point was argued before the High Court and we do not have the benefit in this regard either of the Tribunal or of the High Court. In this view We decline to go into the question but confine to the 1st question and agree with the High Court answering the reference in favour of the revenue and against assessee that the appellant is not entitled to the development rebate u/s 33(1) of the Act. The appeal is accordingly dismissed with costs quantified at Rs. 5,000." 27. In the judgement of Hon'ble Supreme Court 'A.V. Murthy' V. 'B.S. Nagabasavanna' (Criminal Appeal No. 206 of 2002 - decided on 8.2.2002)(MANU/SC/0089/2002) at paragraph 5 it is observed as under:- ".....Moreover, in the instant, the appellant has submitted before us that the respondent in his balance sheet prepared for every year subsequent to the loan advanced by the appellant had shown the amount as deposits ....
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....08.2017 by the 1st Respondent / Bank) on 18.2.2019, directing the defendants 1 to 3 therein to pay the dues within two months from the date of judgement etc. and in fact the relief sought for by the 1st Respondent / Bank in the said application praying for issuance of recovery certificate to the tune of Rs. 19,25,81,173.31 only together with interest at 13.20% p.a. with monthly rests and costs was granted etc. 32. It transpires that Director of the 2nd Respondent / Jason Dekor Pvt. Ltd. had confirmed the correctness of the balance of Rs. 14,34,42,101.00 dated 15.10.2013, on 01.11.2013 and over the revenue stamp had affixed his signature. Likewise, the Director of the 2nd Respondent had confirmed the correctness of the balance dated 05.06.2016 and had affixed his signature on 05.06.2016 itself. Likewise, on 20.05.2015 the Director of the 2nd Respondent had confirmed the correctness of the balance in respect of the credit facilities availed by it and the signature was affixed on 20.05.2015. On 02.09.2016 the Director of the 2nd Respondent / 'Corporate Debtor' had executed the revival letter to and in favour of the 1st Respondent / Bank. Similarly, on 31.03.2017, on behalf of the 2....
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....al' Vs. 'Bank of Baroda' in Company Appeal (AT) (Ins) No. 225 of 2020 and in Jagdish Prasad Sarada Vs. Allahabad Bank in Company Appeal (AT) (Ins) No. 183 of 2020, (both being three Members Bench) had taken a stand that the Limitation Act, 1963 will be applicable to all NPA cases provided, they meet the criteria of Article 137 of the Schedule to the Limitation Act, 1963, the extension of the period can be made by way of Application under Section 5 of the Limitation Act, 1963 for condonation of delay; however, the peculiar attendant facts and circumstances of the present case which float on the surface are quite different where the 1st Respondent / Bank had obtained Confirmations/Acknowledgments in writing in accordance with Section 18 of the Limitation Act periodically. As a matter of fact, Section 18 of the Limitation Act, 1963 is applicable both for 'Suit' and 'Application' involving 'Acknowledgment of Liability', creating a fresh period of limitation, which shall be computed from the date when the 'Acknowledgment' was so signed. 37. For better and fuller appreciation of the present subject matter in issue, it is useful for this Tribunal to make a pertinent reference to Sectio....