TaxTMI 
TaxTMI 
2021 (7) TMI 59
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...., 2016 ("I&B Code" for short) filed by the Respondent No.1- 'Punjab National Bank' against the Corporate Debtor. 2. The Respondent No.1- 'Punjab National Bank' (hereinafter referred to as "Bank") filed the Application under Section 7 of the 'I&B Code' on 11th September, 2019. The Bank claimed that it advanced a term loan of Rs. 200 Crores on 17th March, 2011 to the Corporate Debtor. The Bank referred to further documents including common Loan Agreement executed on 5th April, 2014 and another Working Capital Consortium Agreement and Deed of Hypothecation dated 20th August, 2014. The Bank claimed that the account of the Corporate Debtor became NPA on 15th March, 2016. On 10th May, 2016, Notice under Section 13(2) of the SARFAESI Act, 2002 was issued to the Corporate Debtor demanding Rs. 173,80,62,160/- as on 31st March, 2016 plus interest. On 10th July, 2018, the Corporate Debtor acknowledged debt outstanding by a letter sent to the Bank. The Application was thus filed on 11th September, 2019 before the Adjudicating Authority claiming debt due and in default of Rs. 268,37,90,311/-. The date of default was intimated in Form is 15th March, 2016. 3. Before the Adjudicating Authori....
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....ection 7 of the 'I&B Code' after expiry of the period of three years from the date of NPA was barred by law of limitation. Relying on the Judgment in the matter of "Babulal Vardharji Gurjar" (supra), it is claimed in the Appeal that the Judgment in the case of "Jignesh Shah & Anr. vs. Union of India- (2019) 10 SCC 750" held that Section 18 of the Limitation Act, 1963 is not applicable to an Application under Section 7 of the 'I&B Code'. Thus, according to Appeal, the Adjudicating Authority could not have relied on the acknowledgment dated 10th July, 2018. It is claimed that the date of default cannot be shifted and that Section 7 of the 'I&B Code' was not a recovery proceeding. 6. We have heard Learned Counsel for the Appellant and the Bank. It may be mentioned that the question with regard to applicability or nonapplicability of Section 18 of the Limitation Act, 1963 is now settled by the Hon'ble Supreme Court in recent judgments such as in the matter of "Sesh Nath Singh & Anr. vs. Baidyabati Sheoraphuli Co-Operative Bank Ltd. & Anr."- [Civil Appeal No. 9198 of 2019] passed on 22nd March, 2021 and then in Judgement in the matter of "Laxmi Pat Surana vs. Union Bank of India & An....
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.... condonation of delay under Section 5 of the Limitation Act as of right, without making an application. .......................................................................... 66. Similarly under Section 18 of the Limitation Act, an acknowledgement of present subsisting liability, made in writing in respect of any right claimed by the opposite party and signed by the party against whom the right is claimed, has the effect of commencing of a fresh period of limitation, from the date on which the acknowledgment is signed. However, the acknowledgment must be made before the period of limitation expires. 67. As observed above, Section 238A of the IBC makes the provisions of the Limitation Act, as far as may be, applicable to proceedings before the NCLT and the NCLAT. The IBC does not exclude the application of Section 6 or 14 or 18 or any other provision of the Limitation Act to proceedings under the IBC in the NCLT/NCLAT. All the provisions of the Limitation Act are applicable to proceedings in the NCLT/NCLAT, to the extent feasible. 68. We see no reason why Section 14 or 18 of the Limitation Act, 1963 should not apply to proceeding under Section....
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....en retrospective effect; which included application of the provisions of the Limitation Act on case-to-case basis. Indeed, the purport of amendment in the Code was not to reopen or revive the time barred debts under the Limitation Act. At the same time, accrual of fresh period of limitation in terms of Section 18 of the Limitation Act is on its own under that Act. It will not be a case of giving new lease to time barred debts under the existing law (Limitation Act) as such." 9. Thus, the claim made in the Appeal that in judgment in the matter of "Babulal Vardharji Gurjar" (supra), the Hon'ble Supreme Court has held that Section 18 of the Limitation Act, 1963 is not applicable to an Application under Section 7 of the 'I&B Code' is misconceived. 10. In the judgment in the matter of "Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal & Anr" (supra) also, the Hon'ble Supreme Court mentioned in Para 8, as under:- "7. From the above, it is clear that the principle of Section 9 of the Limitation Act is to be strictly adhered to, namely, that when time begins to run, it cannot be halted, except by a process known to law. One question that arises before this Court i....
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....r should be decided. 13. The Learned Counsel for the Bank has argued and supported Judgment passed by the Adjudicating Authority and claimed that the Appeal deserves to be dismissed. According to the Counsel for the Bank, the Bank had made necessary pleadings and the issue of limitation was also discussed and decided and thus, there is no question of remanding the matter. 14. Considering the submissions made by the Learned Counsel for the Appellant, we have seen the observations, findings and directions of the Hon'ble Supreme Court with regard to other Appeals disposed with the matter of "Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal & Anr". (A) In Civil Appeal No. 3 of 2021 which was before the Hon'ble Supreme Court, what appears is that the NCLT had admitted Application under Section 7 of the 'I&B Code'. This Appellate Tribunal held that the entry in Balance Sheet will not amount to an acknowledgment. The Hon'ble Supreme Court in Civil Appeal No. 323 of 2021 found that the Balance Sheet could be looked into for the purpose of acknowledgment. The Counsel for the Appellant- Financial Creditor in Civil Appeal No. 3 of 2021 argued that the Appeal should be remand....
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....is Tribunal by Impugned Order dated 14th October, 2020 held that the date of NPA of 28th May, 2014, had been changed to 31st January, 2010 when attempt to restructure account of Corporate Debtor failed. As such, this Tribunal for such and other reasons recorded that the claim was barred by limitation and had allowed the Appeal. It appears that against such order Civil Appeal No. 3765 of 2020 was filed before the Hon'ble Supreme Court. The Learned Senior Counsel Shri Rohatgi submitted before the Hon'ble Supreme Court that in the written submissions filed before this Tribunal after judgment was reserved, it was pointed out acknowledgment of liability in Balance Sheet for the year 2014-15 was there. It was claimed that written submissions were not taken into consideration. Learned Senior Counsel for the Respondent Shri C.A. Sundaram argued that the written submissions can never be substituted for pleadings, and if pleadings are deficient, there ends the matter. The Learned Senior Counsel for the Appellant Shri Rohatgi presented an application before the Hon'ble Supreme Court to amend the pleadings, stating that this can be allowed even at this stage, as per the judgments of the Hon'bl....
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....tries Pvt. Ltd. & Anr." (supra), the Hon'ble Supreme Court dealt with the relevant factual and background aspects of the Application of Financial Creditor in that matter. The Hon'ble Supreme Court referred to the format which was filed and contents of the format in that matter and the defence raised by the Corporate Debtor (in Para 15 of the Judgment) and the orders which were passed by the Adjudicating Authority for initiating CIRP. It was noticed that the matter was carried in Appeal to this NCLAT but was summarily dismissed (See Para 21 of the Judgment) which led to the filing of the Civil Appeal No. 10710/2018 before the Hon'ble Supreme Court. The Hon'ble Supreme Court observed in Paras 24 & 25, as under:- "24. In the order dated 26.02.2019, this Court took note of the fact that in appeal before the Appellate Tribunal, one of the grounds agitated was that the claim of the respondent was barred by time for, admittedly, the default was committed on 08.07.2011 whereas the application was filed in the month of March, 2018. 25. After noticing that the principal issue relating to limitation, though raised by the appellant, was not even decided by the Appellate Tribu....
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.... 'I&B Code' and in that context observed in Para 96 that where only the date of default as "08.07.2011" has been stated for the purpose of maintaining the application under Section 7 "and not even a foundation is laid in the application for suggesting any acknowledgment or any other date of default", the submissions sought to be developed on behalf of the Respondent No.2 at the later stage it was held cannot be permitted. (C) What appears is that in the first round of litigation and upto the Hon'ble Supreme Court, the issue of limitation had not been agitated before the Adjudicating Authority and this Tribunal and when the matter was remanded by the order of the Hon'ble Supreme Court dated 26th February, 2019, this Tribunal had in order dated 14th May, 2019 dealt with the issue of limitation. The Hon'ble Supreme Court in these set of facts observed that the foundation with regard to acknowledgment had not been laid. 17. Now keeping in view the different orders passed by the Hon'ble Supreme Court while disposing the matter with regard to "Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal & Anr" it shows that the pleadings can be brought on record or amended even at ....
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....onal Bank, Tolstoy House, Tolstoy Marg, New Delhi- 110001 Dear Sir, Sub: Credit facilities- A/c M/s. Amzen Machines Pvt. Ltd. We would like to inform you the outstanding debit balance under various credit facilities availed by M/s. Amzen Machines Pvt. Ltd. are as under:- Lender Nature of credit facility Debit Balance (in Rs.) As on date Whether interest is including upto date Punjab National Bank Term Loan 2,15,74,43,221.01 31.03.2018 Yes Bank of India Term Loan 1,28,12,35,576.47 31.03.2018 Yes Same had been shown in the Annual balance sheet for FY 2017- 18 ending as on 31.03.2018 as per table below:- PARTICULARS AMOUNT Current Maturities of Long Term Debt* 2,54,17,53,662 Interest due but not paid 85,15,72,561 Instalment Due but not paid 66,40,78,936 Total 4,05,74,05,159 Note:*include secured loan of Rs. 61,87,26,361 We hope you will find the above in order. For Amzen Machines Pvt. Ltd. Sd/- Authorizes Signatory" 22. The reply filed by the Corporate Debtor (Annexure-3, Page 336) which was filed before the Ad....