TaxTMI 
TaxTMI 
2021 (5) TMI 443
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....e) at Paragraph 10 had among other things observed that the 'Financial Creditor' had established the 'debt and default' through various documents filed along with the Applications and ultimately, admitted the 'Application' by declaring the 'Moratorium' and issued necessary directions thereto. Appellant's Contentions: 3. According to the Learned Counsel for the Appellant, the Appellant is the 'Promoter/Suspended Director' of 'Corporate Debtor', controlling the majority of shareholding 100% of the paid-up capital of Saptarishi Hotels Private Limited ('Corporate Debtor') through its holding Company, Maha Hotels Projects Private Ltd. 4. The Learned Counsel for the 'Appellant' submits that the 'Corporate Debtor'/M/s.Saptarishi Hotels Private Limited is a 'Special Purpose Vehicle' incorporated to undertake a Public Private Partnership (PPP) project to develop and operate a Four Star Hotel on 'Build Operate Transfer' (BOT) Basis under Andhra Pradesh Infrastructure Development Enabling Act, 2001 with National Institute of Tourism and Hospitality Management (NITHM), 'an undertaking of Telangana "Tourism Development Corporation Limited" (which is fully owned company of the Government of T....
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....the I & B Code) is barred by 'Limitation', as the same was filed on 18.07.2019 or any date thereafter. 9. The Learned Counsel for the Appellant emphatically contends that if the 'Date of Default' is considered as the date from which the limitation starts running then, the Petition under Section 7 of the I & B Code is barred by 111 days or more and if date of 'NPA' is considered to be date from which the limitation starts running then, the Petition is barred by 19 days or more. 10. The Learned Counsel for the Appellant submits that the 'Adjudicating Authority' has no jurisdiction to admit the 'Corporate Debtor' for 'Corporate Insolvency Resolution Process' in spite of the fact the same being barred by 'Limitation'. 11. The Learned Counsel for the Appellant points out that the impugned order was passed in violation of the principles of 'Natural Justice', since no finding was rendered on the issue of Section 7 Application being barred by 'Limitation'. 12. The Learned Counsel for the Appellant projects an argument that 'CIRP' is a proceeding for 'Resolution of Insolvency' and not for repayment of 'Debt' and therefore, an 'Acknowledgement of Debt' will not help the cause of the 'App....
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....s, and held that the winding up petition filed beyond three years from the date of default was barred by time. 93. Even in the later decisions, this Court has consistently applied the declaration of law in B.K. Educational Services (supra). As noticed in the case of Vashdeo R. Bhojwani (supra), this Court rejected the contention suggesting continuing cause of action for the purpose of application under Section 7 of the Code while holding that the limitation started ticking from the date of issuance of recovery certificate dated 24.12.2001. 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." 1st Respondent's Submissions: 15. The Learned Counsel for the 1st Respondent/Bank contends that the Appellant had not filed two vital documents viz. the 'Balance and Security Confirmation Letter' dated 20.02.2018 executed by the 'Corporate Debtor'. Further, on behalf of the 1st Respondent/Bank, ....
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....ent case, the respondent No.2 never came out with any pleading other than stating the date of default as '08.07.2011' in the application. That being the position, no case for extension of period of limitation is available to be examined. In other words, even if section 18 of the Limitation Act and principle thereof were applicable, the same would not apply to the application under consideration in the present case looking to the very averment regarding default therein and for want of any other averment in regard to acknowledgement. In this view of the matter, reliance on the decision in Mahaveer Cold Storage Pvt. Ltd. does not advance the cause of the Respondent No.2. 30. An acknowledgement of debt interrupts the running of prescription. An acknowledgement only extends the period of limitation as per decision 'P. Sreedevi' v. 'P. Appu', AIR 1991 Ker 76. It is to be remembered that a mere denial will not take sheen off the document and the claim of creditor remains alive within the meaning of Section 18 of the Limitation Act. Besides this, an acknowledgement is to be an 'acknowledgement of debt' and must involve anadmission of subsisting relationship of debtor and creditor: and an....
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.... 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/Acknowledgements 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 'Acknowledgement' 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 Section 18 of the Limitation Act, 1963 which runs as under: "18 Effect of acknowledgment in writing:- (1) Where, before the expiration of the prescribed period for a suit or 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....
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....uthority in admitting CP No. (IB) 257/7/NCLT/AHM/2019 and declaring moratorium etc. Resultantly, all connected Interlocutory Applications are closed. There shall be no order as to costs." 18. The Learned Counsel for the 1st Respondent/Bank submits that the order of the Three Members Hon'ble Bench made in Bishal Jaiswal v Asset Reconstruction Company (India) Ltd. and Another (Company Appeal (AT) INS 385 of 2020 on the file of National Company Law Appellate Tribunal, New Delhi relates to the reference for reconsideration of the Judgment of the 'Appellate Tribunal' rendered in the case of V. Padmakumar vs. Stressed Assets Stabilisation Fund and in the said Judgment, the issue that arose with the 'Tribunal' was whether an 'Acknowledgement of Debt' in the 'Balance Sheet' can be treated as a valid acknowledgement for an extension of limitation period. Discussions: 19. In the Application filed by the 1st Respondent/Punjab National Bank ('Financial Creditor') [under Section 7 of the I & B Code r/w Rule 4 of the Insolvency and Bankruptcy (Application to 'Adjudicating Authority') Rules, 2016] to initiate CIRP in respect of M/s. Saptarishi Hotels Private Limited, the Bank under Part-IV 'Pa....
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...., Ranga Reddy District, Hyderabad. To monitor the 'Credit facilities' in respect of M/s.Saptarishi Hotels Private Limited/'Corporate Debtor', the 1st Respondent/Punjab National Bank was nominated as the 'Lead Bank'. 24. The clear cut stand of the 1st Respondent/Bank is that the 'Corporate Debtor' (as agreed) had failed in its repayment of the balance amount, inspite of repeated reminders given by the Bank/'Financial Creditor', in respect of the loan facilities availed by it. 25. It is brought to the fore that the 1st Respondent/Bank/'Financial Creditor' had issued a notice to the 'Corporate Debtor' on 02.06.2016, as per Section 13(2) of the SARFAESI Act and that the 'Corporate Debtor' had not paid the debt sum, despite the lapse of 60 days' time given to it. 26. As on 30.06.2019, the outstanding amount due to be paid to the 1st Respondent/'Financial Creditor'/Bank was Rs. 144.03 Crores. The 'Corporate Debtor' and the 'Guarantors' had executed 'Balance and Security Confirmation Letters' dated 20.02.2018 in respect of the accounts of Saptarishi Hotels Pvt. Ltd. thereby acknowledging the 'debt' in unequivocal terms. Admittedly, a payment of Rs. 15,262.75 was made by the 'Corporate ....
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....y (India) Ltd. and Anr. Company Appeal (AT)(INS) No.385 of 2020 (vide paragraphs 33 and 34) and allowed the Appeal by remanding the matter to the NCLAT to be decided in accordance with law laid down in the Judgment. Insolvency and Bankruptcy Code, 2016: 30. Section 3(6)(a) of the I & B Code, 2016, defines "claim" meaning 'a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured'. Section 3(8) of the Code defines "Corporate Debtor" meaning 'a Corporate person who owes a debt to any person'. Section 3(10) defines "Creditor" meaning 'any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder. 31. Section 3(11) of the I & B Code, defines "debt" meaning 'a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. Section 3(12) of the code, defines "default" meaning 'non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may b....