TaxTMI 
TaxTMI 
2021 (3) TMI 118
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....ode, 2016 (in short the 'IBC'). While admitting the Application, the Learned Adjudicating Authority in the Impugned Order observed as follows:- "15. On perusal of the Sanction letters dated 07.05.2010, 28.09.2010 and 17.09.2011, Term Loan Facility Agreement dated 29.09.2010 and Bank statement of the Corporate Debtor's account annexed to the Application and it is established that the Corporate Debtor has received the debt amount. 16. On perusal of letter dated 11.06.2017 issued by Corporate Debtor to Applicant seeking restructuring of the loan and Balance & Security Confirmation Letter dated 17.06.2017, it is clear that the Corporate Debtor has admitted to its liability to repay the debt amount received from the Applicant. 17. On perusal of the bank statement of the Corporate Debtor along with certificate under section 2A of the Bankers Books Evidence Act, 1891 it is seen that the Corporate Debtor has not made any payments to the Applicant. The date of default being the date of classification of the Corporate Debtor's account as NPA i.e. 31.03.2013. 18. The Corporate Debtor initiated proceedings before Debt Recovery Tribunal, Pune in OA No....
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....s.' has observed that 'Section 7 Application filed under the Code is an independent proceeding which has nothing to do with the transfer of pending and winding up proceedings before the High Court' and submitted that in view of the precedent laid down by the Hon'ble Supreme Court, pendency of winding up Petition before the High Court will not be a bar for initiation of proceedings under Section 7 of the Code. 5. The Learned Counsel further submitted that the Account was classified as NPA on 31.03.2013, but the Application filed under Section 7 is well within the period of limitation as it is a well settled proposition of law that wherever there is an acknowledgement of debt in writing, the period of limitation gets extended and fresh limitation starts from the date of acknowledgement by virtue of the provision of Section 18 of the Limitation Act, 1963. The Learned Counsel placed reliance on the letter dated 11.06.2017 (exhibit W) addressed by the Corporate Debtor to the Respondent Bank requesting for restructuring of the existing loan and sanction of fresh loan. The Counsel also drew our attention to the 'Balance and Security Confirmation Letter' dated 17.06.2017 wherein the Cor....
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....ization' (Supra) and in 'Forec India Limited' V/s. 'Edelwiss Assets Reconstruction Company Limited' in Civil Appeal No. 818 of 2018 that the Application under Section 7 was maintainable irrespective of the pendency of the Petition before the Hon'ble High Court of Bombay in CP No. 614 of 2015 in which the Hon'ble High Court has passed Order of winding up the Company on 04.01.2018. 9. The Resolution Professional has also filed a status report that seven CoC Meetings were conducted and in the Meeting held on 07.10.2020 one Expression of Interest (EOI) was received from a prospective Resolution Applicant after the cutoff date, however, a decision was taken by the CoC to republish the Form-G to accommodate the prospective Resolution Applicant. 10. Now we address ourselves to the main point for consideration as to whether the Section 7 Application is barred by limitation. The Hon'ble Supreme Court in 'Babulal Vardharji Gurjar' V/s. 'Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr.', 2020 SCC Online SC 647, has elaborately discussed the issue of Limitation and placing reliance on 'BK Educational Services (P) Ltd.' (2019) 11 SCC 633, 'Gaurav Hargovindbhai Dave' V/s. 'Asset Reconstru....
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....le, 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." 11. The Hon'ble Apex Court in 'Babulal Vardharji Gurjar' (Supra) has also reproduced the relevant passages of the said decision in 'Gaurav Hargovindbhai Dave' (Supra) detailed as hereunder "4. Mr Aditya Parolia, learned counsel appearing on behalf of the appellant has argued that Article 137 being a residuary article would apply on the facts of this case, and as right to sue accrued only on and from 21.07.2011, three years having elapsed since then in 2014, the Section 7 application filed in 2017 is clearly out of time. He has also referred to our judgment in B.K. Educational Services Private Limited v. Parag Gupta and Associates, 2018 SCC OnLine SC 1921 in order to buttress his argument that it is Article 137 of the Limitation Act which will apply to the facts of thi....
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....n 238A into the Code. This is to be found in the Report of the Insolvency Law Committee of March, 2018, as follows: "28. APPLICATION OF LIMITATION ACT, 1963 28.1 The question of applicability of the Limitation Act, 1963 ("Limitation Act") to the Code has been deliberated upon in several judgments of the NCLT and the NCLAT. The existing jurisprudence on this subject indicates that if a law is a complete code, then an express or necessary exclusion of the Limitation Act should be respected. In light of the confusion in this regard, the Committee deliberated on the issue and unanimously agreed that the intent of the Code could not have been to give a new lease of life to debts which are time barred. It is settled law that when a debt is barred by time, the right to a remedy is time-barred. This requires being read with the definition of 'debt' and 'claim' in the Code. Further, debts in winding up proceedings cannot be time-barred, and there appears to be no rationale to exclude the extension of this principle of law to the Code. 28.2 Further, non-application of the law on limitation creates the following problems: first, it reopens the right ....
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....Again, in the case of Gaurav Hargovindbhai Dave (supra), where the date of default was stated in the application under Section 7 of the Code to be the date of NPA i.e., 21.07.2011, this Court held that the limitation began to run from the date of NPA and hence, the application filed under Section 7 of the Code on 03.10.2017 was barred by limitation. 32.2. In view of the above, we are not inclined to accept the arguments built up by the respondents with reference to one part of observations occurring in paragraph 21 of the decision in Jignesh Shah (supra). 33. Apart from the above and even if it be assumed that the principles relating to acknowledgement as per Section 18 of the Limitation Act are applicable for extension of time for the purpose of the application under Section 7 of the Code, in our view, neither the said provision and principles come in operation in the present case nor they ensure to the benefit of respondent No. 2 for the fundamental reason that in the application made before NCLT, the respondent No. 2 specifically stated the date of default as '8.7.2011 being the date of NPA'. It remains indisputable that neither any other date of default has be....