TaxTMI 
TaxTMI 
2021 (4) TMI 574
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....e Corporate Debtor is a company incorporated under the provisions of Companies Act, 1956 and is engaged in the business of infrastructure and manufacture of general purpose machinery. 4. The Petitioner had advanced an amount of Rs. 2.00 crore at the request of the Corporate Debtor on 05.04.2012 and 07.04.2012.The Corporate Debtor issued loan acknowledgement letter dated 05.04.2012 and 07.04.2012, Demand Promissory Note as well as receipts dated 05.04.2012 and 07.04.2012. 5. Various loan extension letters were executed by the parties dated 12.10.2012, 13.12.2012, 28.02.2013, 16.03.2013, 30.07.2013, 03.09.2013, 02.12.2013, 01.03.2014, and 01.10.2014. The Corporate Debtor also issued fresh Demand Promissory Notes on the same days. The loan extension letters mentioned above incorporate the complete terms of understanding between the parties including rate of interest and terms of repayment. The Petitioner transferred sum of Rs. 2.00crore vide RTGS on 05.04.2012 and 07.04.2012. 6. To secure the amounts under the loan transactions, the Corporate Debtor issued Post Dated Cheques (PDCs) dated 03.10.2012 bearing nos. 09113 and 09116 drawn on State Bank of India (SBI) amounting to Rs. 2.0....
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....ould have arisen on 01.01.2015. The period of three years to initiate proceedings as per IBC is therefore, expired on 31.12.2017 and hence the petition is barred by the limitation. The TDS certificates cannot be construed as admission/acknowledgment of liability. 12. It is settled law that a TDS certificates is primarily to acknowledge deduction of tax at source and that TDS certificate would not refer to any amount of loan even the interest that is payable on the principal amount. The TDS certificates do not satisfy the essential requirements of acknowledgement, the TDS certificates cannot be construed as documents u/s 25 of the Indian Evidence Act and Sec 18(1) of Limitation Act. 13. The Petitioner states that the default occurred on 14.10.2019, when the Corporate Debtor replied to the legal notice dated 25.09.2019 issued by the Petitioner, but this cannot be relied upon as issuance of legal notice pre-supposes occurrences of default. 14. The application u/s 7 is defective and is liable to be dismissed. 15. The Petitioner seeking an order of admission based on oral understanding. In the absence of any written document on record the application u/s 7 is not maintainable. 16. ....
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....on'ble Supreme Court held that default in section 3(12) of the IBC uses the term 'due and payable' followed by the expression and is not paid by the Debtor or the Corporate Debtor, therefore, section 3(12) refers to whole or any part of debt. It was also held that the Limitation Act is applicable to applications filed under Section 7 & 9 of the Code, Article 137 of the Limitation Act gets attracted. The right to sue accrues when a default occurs. If a default has occurred over three years prior to filing of the Application, the application is barred by Limitation under Article 137 of the Limitation Act, save an except in those cases where, in the facts of the case Section 5 of the Limitation Act may be applied to condone the delay in filing of such applications. 22. The Counsel for the Corporate Debtor also relied upon the judgment of "Babulal Gurjar vs. Veer GurjarAluminium Industries Pvt. Ltd." [ 2020 SCC Online SC 647] wherein the Supreme Court held that the Code is beneficial legislation intended to put the Corporate Debtor back on its feet, not a mere money recovery legislation. That CIRP is not intended to be adversarial to the Corporate Debtor but is aimed to at protecting ....
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....t of application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation.-For the purposes of this section,- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right; (b) the word "signed" means signed either personally or by an agent duly authorised in this behalf; and (c) an a....
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....ement of liability' creating a fresh period of limitation which shall be computed from the date when the Acknowledgement was so signed." 27. The Hon'be NCLAT in MM Ramchandran v. south India Bank Ltd &Ors vide Company Appeal(AT) No.1509 of 2019 on 22.01.2020 agreed with the contentions of the Bank and dismissed the appeal filed by the Corporate Debtor aggrieved by order of admission of CIRP against the Corporate Debtor by NCLT. The Hon'ble NCLAT held that Sec.18 of Limitation Act applies to the proceedings under IBC and any communication which acknowledges that the subsisting jural relationship would constitute an acknowledgement under the Code. The Hon'ble Supreme Court on 17.11.2020 dismissed the appeal filed by MM Ramchandran and confirmed the order of NCLAT which held that Sec.18 of Limitation Act, 1963 applies not only to suits but applications made under IBC. The order of Hon'ble Supreme Court statesas follows: 'Heard. We do not find any merit in the appeal. The appeal is, accordingly, dismissed, pending application(s) if any shall stand disposed of'. 28. Upon conjoint reading of the provisions of the IBC, the Limitation Act and settled propositions of law in catena of....