TaxTMI 
TaxTMI 
2020 (10) TMI 591
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....Corporate Debtor is a Private Company limited by shares and incorporated on 14.03.2007 under the Companies Act, 1956, with the Registrar of Companies (RoC), Maharashtra, Mumbai. Its Corporate Identity Number (CIN) is U51311MH2007PTC168736. Its registered office is at Nos. 58 & 59, 1st Floor, Nakshatra Cine Shoppe, Ranade Road, Dadar (W), Mumbai- 400028 within the State of Maharashtra. Therefore, this Bench has jurisdiction to deal with this petition. 3. The present petition was filed on 10.06.2019 before this Adjudicating Authority on the ground that the Corporate Debtor failed to make payment of a sum of Rs. 1,45,42,74,724.16 (Rupees one hundred and forty-five crore forty-two lakh seventy-four thousand seven hundred and twenty-four and paise sixteen only) as the total claim amount, comprising inter alia of a sum of Rs. 35,44,50,688.47 (Rupees thirty-five crore forty-four lakh fifty thousand six hundred and eighty-eight and paise forty seven only) as principal, Rs. 68,61,49,468.06 (Rupees sixty eight crore sixty-one lakh forty-nine thousand four hundred and sixty-eight and paise six only) as interest and Rs. 9,31,58,997.52 (Rupees nine crore thirty-one lakh fifty-eight thousand ....
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....e credit facilities availed by the Corporate Debtor are placed as Exhibit F (Colly) at pp.108-114. Further an Inter Se Agreement between the Financial Creditor and IDBI Bank Limited was executed on 17.02.2012 and the same is placed as Exhibit G at pp.115-134. ii) A Deed of Guarantee dated 17.02.2012 between Mr. Dinesh G. Jaiswal, director of Corporate Debtor, Ms. Sunita D. Jaiswal, wife of director of the Corporate Debtor, as Personal Guarantors, D.J. Exim (India) Private Limited as Corporate Guarantor in favour of Punjab National Bank (Lead Bank of the Consortium) is placed as Exhibit I at pp.137-153 of the petition. Further a Deed of Guarantee dated 17.02.2012 between Mr. Dinesh G. Jaiswal, director of Corporate Debtor, Ms. Sunita D. Jaiswal, wife of director of the Corporate Debtor, as Personal Guarantors, D.J. Exim (India) Private Limited as Corporate Guarantor in favour of Punjab National Bank as security for the Term Loan is placed at pp.154-167 of the Petition. iii) A Deed of Hypothecation dated 17.02.2012 between the Corporate Debtor and the Financial Creditor and a Joint Deed of Hypothecation between the Corporate Debtor and Financial Creditor and IDBI Ba....
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.... Books Evidence Act, 1891 is placed as Exhibit V (Colly) at pp.456-482F. xi) Further, in pursuance of the action initiated by the Financial Creditor under the SARFAESI Act, secured immovable properties were sold between 27.12.2018 and 30.04.2019. Sale Certificates regarding the same are placed as Exhibit Y (Colly) at pp.490-494. 6. In its reply dated 17.09.2019, the Corporate Debtor has set up the following defence: a) The present Petition is barred by the law of limitation. The cause of action arose on 30.09.2013, the day on which the Corporate Debtor was declared as Non-Performing Asset (NPA). The present petition was filed on 10.06.2019, hence the petition is time barred. b) Further the Financial Creditor initiated a recovery action under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 by notice dated 25.10.2013. Pursuant to the initiation of action the Financial Creditor sold a few properties of the Corporate Debtor which were mortgaged as per 'para 1 and 2' at pp. 1-3 of the reply. c) The Corporate Debtor has relied on section 238-A of Insolvency ....
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....ettlement value was submitted on 15.09.2018 (Exhibit C pp. 106-108 and Exhibit E pp. 110-113 of the rejoinder) e) The Financial Creditor as a consortium leader informed the Corporate Debtor that the one time settlement was not acceptable by any party to the consortium. (Exhibit D p. 109 of the rejoinder). Further a Joint Lenders Meeting was held on 22.10.2018 to discuss about the revised proposal. Minutes of meeting rejecting the revised offer is placed as Exhibit F at pp. 114-116 of the rejoinder. f) Further in pursuance of the action initiated by the Financial Creditor under the SARFAESI Act, secured immovable properties were sold between 27.12.2018 and 30.04.2019. Three secured assets, one immovable property at Charni Road and two cars are still available with the Financial Creditor against their claims but the claim amount is much greater than the value of these remaining secured assets. Findings: 8. We have heard the arguments of both sides and perused the records. 9. The objection of the Ld. Counsel for the Corporate Debtor is on the ground of Limitation and defences raised can be classified as follows on the subject of limitation: (a) Cont....
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....Anr vs. Phoenix Arc Pvt. Ltd. & Anr (2019) 10 SCC 353 which reiterated the same principle. 14. There is no quarrel with reference to the applicability of the Limitation Act to IBC proceedings. In considering this aspect, the defences raised by the Corporate Debtor are answered as follows: On the matter of 'default' not being a continuing wrong 15. The Corporate Debtor submits a default cannot be regarded as continuing wrong so as to invite the application of section 23 of the Limitation Act. 16. The Corporate Debtor has relied on the judgment of the Hon'ble Supreme Court in the case of Vashdeo R. Bhojwani V. Abhudaya Co-operative Bank Limited & Anr. 79(IBC)10/2019 (Exhibit 'B' pp. 61-63 of the reply) by which it was clarified that a default cannot be regarded as a continuing wrong in para 4 as follows: "4. .. If the wrongful act causes an injury which is complete, there is no continuing wrong even though the damage resulting from the act may continue. If, however, a wrongful act is of such a character that the injury caused by it itself continues then the act constitutes a continuing wrong. In this connection it is necessary to draw a distin....
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.... for money was filed on 3.1.2000 which is well beyond three years from 31.3.1995 though within three years from 26.3.1997. The period of limitation for filing a suit of the nature is three years from the acknowledgment and there is a cleavage in judicial opinion as to from which date the period will run 8. *** 9. Will not the signing of the balance sheet and the profit and loss account at best be an acknowledgment made by a director of a debt due to himself is the further question posed by the defendant. Reliance is placed on P. S. Thirumalai Iyengar v. Official Liquidator [AIR 1962 Madras 253(DB)] and A. C. K. Krishnaswami v. M/s. Stressed Concrete Constructions Pvt. Ltd. [AIR 1964 Madras 191]. But the precise question has been answered in Re Gee & Co's case (supra) as follows: 'It seems to me plain that an acknowledgment signed by the directors in relation to their own debt would be fully effective if sanctioned by every member of the company .......... The general meeting of the company at which the accounts were adopted and the state of the Eccles account confirmed was in fact a meeting attended by, or by the representative of, every member of....
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....ion 18 of the Limitation Act, 1963, with attendant consequences. In the present case, there is acknowledgement in the balance sheet of the corporate debtor as at 31.03.2015 and 31.03.2016, and therefore, a fresh period of limitation began to run from that date. Further, the judgment of the Hon'ble Calcutta High Court recognises the fact that "in an appropriate case, the cause of action will be deemed to have accrued at the date of the balance-sheet, being the date to which the signature of the directors relates." In view of the above judgments, it appears to us that the date of signatures of the directors be construed as the date of effective acknowledgement of the state of indebtedness of the company. On the matter of Settlement Offers made: 23. The Financial Creditor has argued by relying on the judgment of the Hon'ble Supreme Court in the case of ITC Limited vs. Blue Coast Hotels Ltd. & Ors. which reads as follows: "Letter of Undertaking 'Without Prejudice' 35. Much was sought to be made of the words "without prejudice" in the letter containing the undertaking that if the debt was not paid, the creditor could take over the secured assets. ....
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....as further submitted an order of the National Company Law Appellate Tribunal (NCLAT) in the case of Babulal Vardhaji Gurjar vs. Veer Gurjar Aluminium & Anr CP (IB)-488/I&BP/MB/2018 which reads as follows: "12. The 'Financial Creditor' has also brought on record a letter dated 31st July 2018 issued by the appellant to the respondent - 'Financial Creditor' for one-time settlement. The aforesaid fact shows that there is a continuous cause of action under Section 19 filed by the respondent - 'Financial Creditor' which is pending before the DRT. 29. Part V (First Division) of Limitation Act relates to 'Suits relating to immovable property' to recover possession of the property mortgaged and afterwards transferred by the mortgagee for a valuable consideration. The period of limitation is 12 years since the transfer becomes known to the plaintiff [Article 61(b)]. 30. In view of the aforesaid position of law, the property having mortgaged, we also hold that the claim is not barred by limitation as the period of limitation is 12 years with regard to mortgaged property and in terms of Section 5(7) read with Section 5(8) as the proper....
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....cy Resolution Process (CIRP) against J- Marks Exim (India) Private Limited [CIN: U51311MH2007PTC168736], the Corporate Debtor, is admitted. (b) There shall be a moratorium under section 14 of the IBC, regarding the following: (i) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (ii) Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; (iii) 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 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002; (iv) The recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor. (c) Notwithstanding the above, during the period of moratorium: (i) The supply of essential goods or services to the corporate debtor, if continuing, shall not be te....