TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 731
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....2016 (hereinafter referred as the 'Code'), on the ground that the Application was barred by Limitation. 2. Submissions of Learned Counsel appearing on behalf of the Appellant Learned Counsel vehemently contended that the Corporate Debtor had failed to repay the amount of the Financial Facility granted to it, on account of which the Corporate Debtor was classified as NPA by State Bank of India (SBI) on 28.02.2002. On 21.05.2005, the Account of the Corporate Debtor was restructured under Corporate Debt Restructuring (CDR) Scheme by the Corporate Debt Restructuring Cell with an approval dated 25.05.2005. Various credit facilities were sanctioned by the SBI under CDR Mechanism till 30.06.2005. It is submitted that the first reference before BIFR was made on 24.11.2003 and the second reference was made on 01.11.2004. The BIFR 107/2004 and 338/2004 respectively were dismissed on 04.05.2016 as not maintainable. Therefore, the period between 27.11.2003 uptill 04.05.2016 has to be excluded for the purpose of calculating limitation. The Application under Section 7 was filed before the Adjudicating Authority on 01.10.2018, within three years of the first accrual of the cause of action ....
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....eed. It is contended that there has been legally untenable proposition of two deeds of Assignment in favour of the Appellant, effective from 31.03.2010 to 21.09.2011. The name of the Appellant does not reflect in the list of charge holders on the MCA websites. The Learned Counsel strenuously argued that no additional documents can be allowed to be placed by the Appellant which were not part of the record before the Adjudicating Authority. The Adjudicating Authority had given an opportunity to the Appellant to rectify the defect in the certificate under the Banker's Book of Evidence Act, subsequent to which, the Appellant filed a compliance affidavit vide diary No. 7268 dated 18.12.2019 which was later withdrawn with the liberty to file a fresh compliance affidavit. Subsequently a fresh compliance affidavit vide diary No. 1246 dated 14.02.2020 was filed attaching another certificate under the Banker's Book of Evidence Act. Hence sufficient opportunity was given to the Appellant and further ought to be permitted to be filed at this stage. Assessment: 4. While dismissing the Application preferred under Section 7 of the Code, the Ld. Adjudicating Authority observed as follows: ....
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....piration of the prescribed period and therefore, Section 18 of the Limitation Act, 1963 does not have Application. Moreover, the acknowledgment of liability is to be made in writing signed by the party against whom the property or right is claimed. No such signatures at pages 922 and 923 of the petition are brought to our notice. Moreover, pages 922 and 923 are only "Classification of Borrowings (Table)" and the complete Balance Sheet is not filed. The plea under Section 18 of the Limitation Act is therefore, rejected. 30. The learned counsel for Invent Assets has relied on M/s R. Sureshchandra & Co. vs. M/s Vadnere Chemical Works AIR 1991 Bom 44 and to para 10 thereof which reads as follows:- "10. There is another reason why the claim is good in law even if we assume that Ex. D was not executed before the expiry of period of limitation. Section 25(3) Contract Act validates a promise to pay a debt barred by limitation. This, it was argued, is not the stand of the plaintiff and cannot therefore be taken into consideration. The pleadings do not have to reflect legal submissions. They are to incorporate only the material facts. The making of the acknowledgment has been pleaded and....
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....hin the meaning of Section 25(3) of the Contract Act. In the discussion with reference to Section 18 of the Limitation Act, we have found that the complete balance sheet for 2015-16 and 2018-17 is not filed and that even the extract given at pages 922 and 923 of the petition are not signed. Therefore, the judgement of the Hon'ble Bombay High Court in M/s R. Sureshchandra & Co. vs. M/s Vadnero Chemical Works AIR 1991 Bom 44 supra and Section 25(3) of the Indian Contract Act are not applicable to the facts of the present case. 33. In result thereof, the plea raised by Girnar that the Application in CP (1B) No.347/Chd/Pb/2018 is not filed within the period of limitation is accepted. 34. CA No.882/2019 is allowed and CP 1B No.347/Chd/Pb/2018 is dismissed. Pronounced in open court" 5. The main point for consideration in this Appeal is whether the Application preferred by the Appellant under Section 7 of the Code, is barred by Limitation. 6. It is not in dispute that the SBI had declared the account of the Corporate Debtor as NPA on 28.02.2002. On 25.04.2006, the Corporate Debtor was declared sick by BIFR under the SICA Act, 1986. It is the main case of the Appellant that the....
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.... on the touchstone of the ratio of the Hon'ble Supreme Court in 'Dena Bank (now Bank of Baroda)' Vs. 'C. Shivakumar Reddy & Anr.' 2021 SCC OnLine SC 543, in which Judgement, the Hon'ble Apex Court in paras 142 & 143 has concluded as follows:- 142. To sum up, in our considered opinion an application under Section 7 of the IBC would not be barred by limitation, on the ground that it had been filed beyond a period of three years from the date of declaration of the loan account of the Corporate Debtor as NPA, if there were an acknowledgement of the debt by the Corporate Debtor before expiry of the period of limitation of three years, in which case the period of limitation would get extended by a further period of three years. 143. Moreover, a judgment and/or decree for money in favour of the Financial Creditor, passed by the DRT, or any other Tribunal or Court, or the issuance of a Certificate of Recovery in favour of the Financial Creditor, would give rise to a fresh cause of action for the Financial Creditor, to initiate proceedings under Section 7 of the IBC for initiation of the Corporate Insolvency Resolution Process, within three years from the date of the judgment and/or dec....
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.... acknowledgment of liability made in writing, signed by the party against whom the property or right is claimed and hence Section 18 of the Limitation Act, 1963 cannot be made applicable to the facts of the instant case. 11. In Jignesh Shah and Anr. Vs. Union of India 2019 (10) SCC 750, the Hon'ble Apex Court observed that "the acknowledgment of liability under Section 18 of the Limitation Act, 1963 would certainly extend the limitation period but a suit for recovery which is a separate and independent proceeding distinct from the remedy for winding up would in no manner impact the limitation within which the winding up proceeding is to be filed, by somehow keeping the date alive for the purpose of winding up proceeding". In 'Basudev R. Bhujwani' Vs. 'Abhyudaya Co-operative Bank Ltd.' (2019) 9 SCC 158, it is further held that "the right to sue accrues when a default occurs". In 'B.K. Educational Services Pvt. Ltd.' Vs. 'Parag Gupta and Associates', (2019) 11 SCC 633, it is observed by the Hon'ble Supreme Court that "if the default occurred over three years prior to the date of filing of the Application, the Application would be barred under article 137 of the Limitation Act, save ....