TaxTMI 
TaxTMI 
2020 (10) TMI 824
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....) and Investment Corporation of India Limited (in short ICICI) for an amount of Rs. 41,50,00,000/-(Rupees Forty One Crore Fifty Lacs only). The Corporate Debtor had committed default in repayment and thereby the loan was recalled by issuing of Section 13(2) notice under the SARFAESI Act 2002 on 20th November 2017 by classifying the account of the Corporate Debtor as NPA. The said debt was assigned by the IFCIL and ICICI Bank as per the deed of assignment dated 12.01.2007 and 31.03.2004 respectively to ARCL. 2. On the strength of the said assignment deeds ARCIL filed this application claiming that the Corporate Debtor is liable to pay a total sum of Rs. 205,83,38,883/- (Rupees Two Hundred Five Crores Eighty Three Lakhs Thirty Eight Thousand Eight Hundred Eighty Three only) as the outstanding amount due and payable by the Corporate Debtor to the ARCIL and since the Corporate Debtor failed to repay the debt filed this application for initiating the corporate insolvency resolution process. 3. To prove that the Corporate Debtor had availed loan as alleged annexed various documents and the particulars of the documents are shown in Form-1 Part-V which include loan agreement dated 09.03.....
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....on. No supporting documents produced to proves his authority. iii. It is stated that the claim is time barred. The date of default is the date when 1st instalment is due and not paid. The proceedings have been filed with malicious intention to recover an imaginary and arbitrary sum of Rs. 205,83,38,883/-(Rupees Two Hundred Five Crore Eighty Three Lakhs Thirty Eight Thousand Eight Hundred and Eighty Three only). 5. The claim is based on letter dated 11.11.2016 issued by the Uniworth group of which Respondent is a group company, to the Applicant is not at all sustainable under law. On the other hand as per the terms in the settlement the Uniworth group through white Knight has already paid a sum of Rs. 51,10,00,000/- however, the Applicant has breached the terms of agreement despite receiving full amount in respect of various group companies. Despite payment the Applicant failed to release complete charge of assets acquired by the Applicant from all the banks and thus breached the Contract. The Applicant failed to comply with this term of the Settlement as well. Uniworth group was to make payment of balance settlement amount pursuant to Applicant complying with the terms of settle....
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....the loan account as Non-Performing Assets in the books of account of the Corporate Debtor and that the Corporate debtor has not repaid the debt. 11. The Financial Creditor has not given any particulars regarding the occurrence of the default which mandatorily to be included under Part IV serial no. 2. The date of occurrence of default is not mentioned in the Form. However, leave has been asked for by the learned counsel for the Financial Creditor for furnishing proof of default and date of default and produced a notice issued under section 13(2) of the SARFAESI Act. The attempt on the side of the Financial Creditor is that the notice dated 20th November, 2007 issued as per section 13(2) of the SARFAESI Act is the record of default. Since no other proof inclusive of report from NeSL or from CIBIL is produced, relying upon the notice the date of default is recorded as on 20.11.2007 as alleged on the side of the Financial Creditor. 12. The facts regarding availing loan from IFCL Ltd. and ICICI Bank Ltd. by executing various documents of which particulars are given in Form-1 Part-V is not disputed at the time of the argument. The only one objection raised on the side of the Corporate....
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....Financial Creditor in its balance-sheet from the Financial Year 2012 to 2019 and therefore, every year there is fresh start of period of limitation and accordingly, the application filed on 27.11. 2018 is perfectly in time and is maintainable. 18. Counter to the above said submissions, the learned Sr. Counsel Mr. Jishnu Saha for the Corporate Debtor submits that there is no exclusion of period of limitation as claimed by the Financial Creditor in the facts and situation narrated on the side of the Financial Creditor and according to the Learned Sr. Counsel for the Corporate Debtor, there is no exclusion of period of limitation on account of pendency of reference before the BIFR or AAIFR and because of the pendency of proceeding before the DRT. In order to claim exclusion of time of proceeding the burden is heavy on the side of the Financial Creditor to prove that the proceedings initiated by the Financial Creditor in a court without jurisdiction to attract Section 14 of the Limitation Act. 19. In order to attract section 14(1) of the Limitation Act, 1963, the Financial Creditor has to prove that with due diligence the FC prosecuted the same subject matter before a wrong forum. A ....
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.... is that the period of pending OA is to be excluded for computing the period of limitation. On the other hand in Jignesh Shah And Another V. Union of India And Another (2019) 10 SCC 750, the Hon'ble Supreme Court has held that "when time begin to run, it can only be extended in the manner prescribed in the Limitation Act". The Law declared by the Hon'ble Supreme Court is explained clearly in Para 21 of the said judgment which read as follows:- "Para 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 acknowledgement 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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....ed as an acknowledgment under Section 18 of the Limitation Act. 26. Under Section 18 of the Limitation Act no-doubt, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. According to the learned counsel for the Financial Creditor, the financial statements for the period 2016 being the crucial financial statements, for which, a fresh period of limitation is to be started proves that the Corporate Debtor company has defaulted in repayment of dues to the financial institutions, banks and to ARCIL too. The learned counsel referred to the financial statement for the year ending on 31.03.2015, The following entries he relied, read as under:- b- Term Loan "The Term Loan from Financial Institutions are secured/to be secured by, a first mortgage and charge on all the company's- immovable and movable assets present and future and charge on current assets subject to prior charge created and/or to be created thereon to secure borrowings for Working Capital in the ordinary course of business. The first mortgage and charge referred to above shall rank pari passu inter se. iv. The outstanding balance of borrowings from the banks and Financ....
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....ts include the very same narration of view and it does not amount to unequivocal admission as referred to in the order of this Bench in CP (IB) No. 23/KB/2019 referred to on the side of the Financial Creditor and to strengthen the above said submissions, the learned Sr. Counsel appearing for the Corporate Debtor has referred to a judgment of the Hon'ble Appellate Tribunal in Company Appeal (AT) (Ins) No. 1382 of 2019 Gautam Sinha Vs. UV Asset Reconstruction Company Ltd. CA(AT)(Ins) No. 1382/2019. The Hon'ble Appellate Tribunal referring to an entry in the financial statements has observed that the entry referred to in the said appeal cannot be read as an acknowledgement. The reason for laying the above said proposition can be revealed from the Paragraphs 11, 12 and 13, of the said judgment which is reproduced here under:- "11. Question before us is whether in the Balance Sheet which is being relied on, what is seen in the statement and if the same could be read as acknowledgement. Copy of the Balance Sheet of 2016 relied on by the Adjudicating Authority is at Page-412 of the Paper Book of Appeal. Page-412 is the Directors' Report which presented the Annual Report and ....
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.... to the facts in the case in hand. In the case in hand also in none of the financial statements, the Corporate Debtor has admitted the liability voluntarily. Though they admitted the defaulted in repayment the reason for nonpayment is highlighted and the reason is clear that it dispute its liability. The Corporate Debtor has admitted the availing of the loans from the financial institutions but did not admit that it is due and payable and their auditors made a note that the matters being pending before the DRT and lying sub judice. So, applying principle laid down in the Gautam Sinha's case cited above, it appears to us that the entry in the balance sheet disputing the liability towards the Financial Creditor cannot be read as an acknowledgment. Accordingly, we are of the considered opinion that the balance sheets relied on by the Ld. Counsel for the Financial Creditor cannot constitute acknowledgment. As such, there is no acknowledgement at all covered under the purview of Section 18 of the Limitation Act and therefore, we are of the considered opinion that the claim preferred by the applicant is barred by limitation. 31. Ld. Counsel for the Financial Creditor also has had a ....
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....he Group Companies proposed terms of settlement for the acceptance of the Financial Creditor. The Uniworth Group agreed to settle the entire debt amount for an amount of Rs. 75,00,00,000/- (Rs. Seventy Five Crores only) and tendered an amount of Rs. 11,25,00,000/- (Rs. Eleven Crores Twenty Five Lakhs only). The Ld. Sr. Counsel for the Corporate Debtor further would submit that Rs. 38,85,00,000/-also paid thereafter and balance payable is Rs. 23, 90, 00,000/- (Twenty Three Crores Ninety Lakhs Only) and showed its readiness to pay the balance in compliance of the part of the obligation on the side of the Financial Creditor 50% of the agreed amount the Financial Creditor shall release the charge of assets of the Corporate Debtor acquired by the Financial Creditor and since the charge was not released as per the understanding the balance payable as per the settlement has not been paid. According to him, suppressing the said payment towards the debt payable as agreed the Financial Creditor filed this application and, therefore, this application is liable to be dismissed. However, the Ld. Counsel for the Financial Creditor, submits that the above said settlement was revoked since Uniwort....