TaxTMI 
TaxTMI 
2020 (9) TMI 1219
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....ration, maintenance and management of the existing road of a specified section of NH -58 and NH - 72 on Haridwar - Dehradun route, Uttarakhand, on the terms and conditions set out in the Concession Agreement. For the said purposes, the Corporate Debtor availed credit facilities, inter alia, from the Applicant Financial Creditor. That vide Credit Arrangement Letter dated 29.03.2011, the Applicant Financial Creditor sanctioned a rupee term loan facility aggregating to INR 2700 Million with a sub-limit of USD 60 million as an external commercial borrowing ("ECB Facility"), in favour of the Corporate Debtor to part finance the cost of the Project ("DHPL Sanction Letter"). The DHPL Sanction Letter was amended vide an amendatory Credit Arrangement Letter dated 02.12.2011. ii. That pursuant thereto, on 07.06.2011, the Applicant Financial Creditor and the Corporate Debtor executed an ECB facility agreement, wherein the Applicant Financial Creditor undertook to extend a foreign currency \ loan facility up to USD 60 Million ("ECB Facility Agreement") to partly finance implementation of the Project undertaken by the Corporate Debtor. The terms and conditions of the ECB Facility Agree....
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....to terminate the Concession Agreement. Pursuant thereto, the Senior Lenders in-principal agreed that the Corporate Debtor would avail bridge-financing from NHAI to complete the balance work of the Project. NHAI granted approval for one-time fund infusion to the extent of INR 2798.8 subject to signing of a tripartite agreement between the Corporate Debtor, NHAI and Bank of India (as the lead bank of the Senior Lenders) ("Tripartite Agreement"). ix. That on 27.03.2017, due to the default in payment of interest under the DHPL Facilities for the period of September 2016 to February 2017. Applicant Financial Creditor issued a demand notice to the Corporate Debtor demanding payment under the DHPL Facilities. The Financial Creditor directed the Corporate Debtor to pay the total outstanding of INR 187.7 Million. x. That however, despite issuance of the demand notice, the Applicant Financial Creditor did not receive any payment under the DHP-Facilities. xi. That the account of the Corporate Debtor was declared as NP A w.e.f. 31.12.2015. xii. That on 26.04.2018, the Tripartite Agreement as referred to above, was executed, inter alia by the Corporate Debtor....
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....s filed its reply and has asserted the following contentions: i. That it is pertinent to mention that the claim deceitfully filed by the Applicant is Time Barred according to the Limitation Act, which is applicable to this Application under Section 238A of the Insolvency Bankruptcy Code, 2016. ii. That due to the default in payment of interest under the Dehradun Highways Project Limited Facilities, the Applicant Financial Creditor issued a Demand Notice to the Corporate Debtor demanding payment under the DHPL facilities. In the interregnum, the account of the Corporate Debtor was classified as a Non-Performing Asset with effect from 31.12.2015. The said date is mentioned as the date of NPA by the Applicant/Financial Creditor, whereas the date of default as per the Code would be three months prior to NPA date. iii. That in plethora of judgments, it is time and again emphasized that any time, barred Application is bad in law. It is worthy to note that the same is accentuated in "B.K. Educational Services Private Limited vs. Parag Gupta and Associates in Civil Appeal No. 7286 of 2018 that for filing of the Application, Section 5 of the Limitation Act may be ....
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....nancial Creditor has filed its rejoinder and has asserted the following contentions: i. That the Corporate Debtor has also filed an application under Section 10 of the IBC for voluntary initiation of insolvency proceedings against itself. This shows that the financial condition of the Corporate Debtor has deteriorated and warrants immediate resolution under the aegis of the IBC. In view of the same, since the commencement of CIRP is inevitable and further, since the Corporate Debtor has not denied and hence, admitted its debt towards the Petitioner Bank, the present Company Petition deserves to be admitted. ii. That the date of default for the purpose of a Petition under Section 7 of the IBC is the date of NPA. This has been highlighted by the Hon'ble Supreme Court inter alia in the matter of Gaurav Hargovindbhai Dave vs. Asset Reconstruction Company (India) Limited &Anr. [(2019) 10 SCC 572] and Babulal Vardharji Gurjar vs. Veer Gurjar Aluminum Industries Private Limited & Anr. That in the present matter, the date of NPA is 31.12.2015. It is most relevant to mention that on 18.07.2017 i.e. before the expiry of the limitation period starting 31.12.2015, the Cor....
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....by the Hon'ble National Company Law Appellate Tribunal in the matter of Dr. Vishnu Kumar Agarwal vs. M/s. Piramal Enterprises Limited [Company Appeal (AT) (Insolvency) No. 346 of 2018] which provides that the same claim cannot be filed in multiple CIRPs. However, the same is not applicable in the present case since as mentioned hereinabove, the Financial Creditor had withdrawn its claim in the CIRP of the Corporate Debtor's alleged parent company. Further, vide the Company Petition itself (Para 20 at Page 7 of Volume I of the Company Petition), the Petitioner Bank brought has it to the notice of this Tribunal that it has withdrawn its claim in the CIRP of the Corporate Debtor's alleged parent company. vii. That in addition to the above, the RP of the Parent Company has emailed to the Petitioner on 19.03.2020, acknowledging the withdrawal of the Petitioner's claim. The RP of the parent company has specifically mentioned that going forward, the Petitioner's claim will not be reflected in the stakeholders. 5. We have gone through the application, reply and rejoinder and the documents filed by both the parties and heard the arguments of both parties and ....
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....e by the respondent and that document has not been denied by the respondent, therefore, the facts of the decision of Babulal Vardharji Gurjar vs. Veer Gurjar Aluminum Industries Private Limited &Anr. is different from the facts of the case in hand and he further submitted that even the Hon'ble NCLAT in the case of Ishrat Ali has also stated the same facts on the point of Section 18 of the Limitation Act, neither in the Babu Lal Case nor in the Ishrat Ali case, there is any document regarding the acknowledgement of debt and therefore, the applicability of Section 18 of the Limitation Act was not considered but herein the case the said document is available, therefore, these decisions are not applicable. He further submitted that even in the case of Jagdish Prasad Sarada v. Allahabad Bank, Company Appeal (AT) No. 183/2020 decided by the Hon'ble NCLAT has not considered the Section 18 of the Limitation Act. 7. He further submitted that so far the contention of respondent that the petitioner had filed a claim before the R.P. in CIRP initiated against the parent company of the Corporate Debtor i.e. EIEL and on the date of filing of this application the claim was pending befor....
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....Swiss Ribbons Private Limited and Another v. Union of India and Other. 12. He further submitted that the debt is time barred because the NPA was declared on 31.12.2015, which is mentioned at page 12 of the application filed under Section 7 of the IBC and so in view of Jagdish Prasad Sarada v. Allahabad Bank, Company Appeal (AT) No. 183/2020, the date of declaration of account as NPA in such date of default would not sick. 13. He further submitted that in Form C, he has not mentioned the date of NPA and so the present application is defective. He further submitted that Section 18 of the Limitation Act will not apply in the present case and in this regard, he placed reliance upon the decision of Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. He further submitted that the private bank is bound by the decision taken by the CoC and the CoC of the EIEL had specifically approved the consortium during the course of the 18th CoC meeting with 66.6 % voting and so in view of the decision of Hon'ble NCLAT Edelweiss Asset Reconstruction Company Limited v. Sai Regency Power Corporation Private Limited & Ors. C.A. (AT)/Ins. No. 887/2020, the applicant is bound b....
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....e in hand, the petitioner claimed the exemption under Section 18 of the Limitation Act, therefore, before making any comment on the submissions made by the parties, we would like to refer Section 18 of the Limitation Act and Section 18 of the Limitation Act is quoted below:- Section 18 in The Limitation Act, 1963 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 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 omit....
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....nd obligations as mentioned therein" mentioned at page 21-22 of the rejoinder. 20. At this juncture, we would like to refer para 9 page 5 of the application, in which he mentioned that consequently, an amended and restated common loan agreement dated 27.03.2015, was entered into between the Corporate Debtor and the consortium of lenders, comprising of Bank of India, Union Bank of India, Punjab & Sind Bank, Dena Bank, Oriental Bank of Commerce, the Federal Bank Ltd. and the Applicant Financial Creditor ("Senior Lenders"), whereby the Applicant Financial Creditor agreed to extend the DHPL RTL-II Facility to the Corporate Debtor ("Common Loan Agreement II"). If we shall read para 9 along with the letter written by the Corporate Debtor address to the Bank of India enclosed at page 21 of the rejoinder then we are of the considered view that a common loan agreement had arrived with the ICICI Bank, Bank of India and other banks referred in para 9 of this application and this fact has not been denied by the respondent in its reply, therefore, we are of the considered view that although the NPA was declared on 31.12.2015 and according to the date of the NPA, the petitioner was required t....
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....gement in writing was made. 24. In the light of Section 18 of the Limitation Act, when we shall consider the case in hand then we find that as per the NPA the period of limitation comes to an end on 30.12.2018 but prior to that an acknowledgement of debt was made in writing by the Corporate Debtor on 18.07.2017, which is at page 21 of the rejoinder and this letter has not been denied by the respondent rather the contention of the respondent is that in view of the decision of Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. and Jagdish Prasad Sarada v. Allahabad Bank, Section 18 of Limitation Act is not applicable and so the present application is not maintainable. 25. At this juncture, we have gone through the decision of Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. Civil Appeal No. 6347 of 2019 and we find that in para 33 of the judgment, the Hon'ble Supreme Court held that:- "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, ....
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.... 2". 26. Therefore, we are of the view that the matter regarding the acknowledgement under Section 18 was not before the Hon'ble Apex Court and that is the reason the Hon'ble Apex Court in para 33 held that there was no document to show the written acknowledgment as required under Section 18 of the Limitation Act, therefore, no case for extension of period of limitation is available to be examined. 27. At this juncture, we have gone through the decision of Jagdish Prasad Sarada v. Allahabad Bank, Company Appeal (AT) No. 183/2020 decided by the Hon'ble NCLAT and we find that the facts of this case is different from the facts of case in hand and in that case, some payment was made by the Corporate Debtor and from that day the limitation was decided that is not under Section 18 rather under Section 19 of the Limitation Act, therefore, in that case, in our considered view provision of section 18 of the Limitation Act was not for consideration before the Hon'ble NCLAT, hence, we are of the view that the facts of this case is different from the facts of the case in hand, hence, that will not help the applicant. 28. At this juncture, we would also like to refer th....
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....ng the liability in respect of debt. The Books of Account cannot be treated as an acknowledgment of liability in respect of debt payable to the 'Asset Reconstruction Company (India) Ltd.'-('Financial Creditor') signed by the 'Corporate Debtor' or its authorised signatory. 24. In "Sampuran Singh and Ors. v. Niranjan Kaur and Ors.- (1999) 2 SCC 679", the Hon'ble Supreme Court observed that the acknowledgment, if any, has to be prior to the expiration of the prescribed period for filing the suit. In the present case, the account was declared NPA since 1st December, 2008 and therefore, the suit was filed. Thereafter, any document or acknowledgment, even after the completion of the period of limitation i.e. December, 2011 cannot be relied upon. Further, in absence of any record of acknowledgment, the Appellant cannot derive any advantage of Section 18 of the Limitation Act. For the said reason, we hold that the application under Section 7 is barred by limitation, the accounts of the 'Corporate Debtor' having declared NPA on 1st December, 2008. 29. In this decision also, the Hon'ble NCLAT has referred the decision of "Sampuran Singh and....
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.... 32. In course of hearing, Ld. Counsel for petitioner informed us that the RP informed through the email dated 19.03.2020 that the RP acknowledged the decision of the petitioner to withdraw the claim from the CIRP initiated against the parent company of the respondent i.e. EIEL. 33. At this juncture, we would like to mention this fact that the present application was filed on 04.03.2020 and the contention of the petitioner is that before filing this application, he informed the RP for withdrawal of its claim and accordingly, the RP communicated vide email dated 19.03.2020, therefore, of course on the date of filing of this application, the RP had not communicated to the petitioner regarding his acknowledgement for withdrawal of its claim but after the filing of the application and before the application was taken up for hearing, the RP had communicated to the petitioner regarding the withdrawal of the claim. 34. Now, at this juncture, we would like to refer the submission made on behalf of the respondent, who in course of his arguments submitted that the petitioner cannot be permitted to file its claim against the parent company of the respondent i.e. EIEL and also against t....
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....drawal of the petition, which was admitted and form FA also shows that it must be signed by the person who file the application, therefore, the contention of the petitioner that the withdrawal of the claim can only be done under Section 12A of the IBC, after the approval of the 90% voting shares, in our considered view is not applicable in the case, if a person wanted to withdraw its claim submitted before the IRP. It is the IRP, who give an acknowledgement regarding its withdrawal and accordingly, IRP vide email dated 19.03.2020 informed the petitioner that he acknowledged his withdrawal of claim, therefore, we find that of course on the date of filing of application i.e. 04.03.2020 although, the petitioner claimed that he informed the RP for the withdrawal of the claim but the IRP/RP has not communicated its acknowledgement on the date of filing of application i.e. 04.03.2020 rather it was communicated after the filing of application i.e. 19.03.2020, at present, we noticed that there is no such claim pending before any IRP and this fact also been not reverted by the Ld. Counsel for the respondent rather he claimed that when the petitioner had filed this application at that time, ....
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.... question. 43. In the light of the submission, when we shall consider the claim of the applicant and respondent then we find that we have already decided the issue of limitation and we have already held in the aforementioned para that application is within time and we further held that before the filing of this application, the petitioner has already informed the RP regarding his withdrawal of claim from the CIRP proceeding against the parent company of the this respondent i.e. EIEL and accordingly, after filing of this application and before the matter was taken up for consideration on 19.03.2020, the IRP acknowledged the withdrawal of the claim of the petitioner, under such circumstances, while considering the application under Section 7, we have to examine only whether there is Financial Debt or there is any default of payment and application is complete under Sub Section 2 of Section 7 and there is no disciplinary proceeding pending against the proposed IRP, if all the criteria have been fulfilled then the Adjudicating Authority under Section 7(5) has to admit the application. 44. In the light of that, when we shall consider the case in hand then we find that the applican....