TaxTMI 
TaxTMI 
2021 (12) TMI 628
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....phs 8 to 12 stated as under: .. 8. "The Financial Creditor submitted that the following documents prove the debt: (a) Sanction Letter dated 17.02.2010, (b) Loan Agreements dated 04.03.2010, (c) Personal Guarantees of the promoters dated 02.03.2010, (d) Deeds of Hypothecation dated 04.3.2010, (e) Statement of Dues of the Loans in tabular computation of outstanding dues (page 401). 9. We have heard the arguments advanced by the learned counsel for both the sides, perused the documents on record and the authorities cited before us. 10. As regards the issue of limitation raised by the respondent/Corporate Debtor, it is observed that there was OTS proposal dated 28.02.2018 (page 389) between the FC and the CD. From the said proposal it appears that the proposal was sent by the CD on 19.02.2018 for one time settlement of the financial debt. It was considered and accepted by the FC with regard to the existing liability subject to the terms and conditions as contained in the Annexure to the said OTS Proposal dated 28.02.2018. This OTS proposal has been accepted along with all the terms and conditions by the au....
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....he reflection of 'Debt' in the 'Accounts' relating to the period 2017-18 and the proposal of 'One Time Settlement' (in short 'OTS') in the year constitute 'An Acknowledgment of Liability' as per Section 18 of the Limitation Act, 1963, especially when the same was made after expiry of three years period from the date on which the 'Demand' was made. 6. According to the Learned Counsel for the Appellant, even if the Director's Report, which was signed on 01.09.2017 is taken into account, still the Application filed by the Respondent/Financial Creditor is beyond three years of limitation. Besides this, the OTS Application indicates that the same was signed on 28.02.2018 beyond four years and therefore, these documents cannot be relied upon to come to a conclusion that there was 'Acknowledgment of Liability' within three years w.e.f. 04.04.2013 and the Notice under Section 13(2) of SARFAESI Act, 2002 was issued and the Account was classified as 'NPA' on 30.06.2012. 7. The Learned Counsel for the Appellant refers to the Judgment of the Hon'ble Supreme Court in the matter of "Dena Bank (Now Bank of Baroda) V. C. Shivakumar & Anr." (vide Civil Appeal No. 1650 of 2020 dated 04.08.2021....
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....he Learned Counsel for the Appellant comes out with a plea that in the present case, the Unit is running from the year 2014 and is in possession of the Secured Creditors and that the invocation of the IBC is nothing but an abuse of the process of law. 14. The Learned Counsel for the Appellant projects an argument that the 'Adjudicating Authority' had failed to appreciate that the documents were executed beyond three years and not within three years. As such, the same do not constitute an 'Acknowledgment of Liability'. RESPONDENT'S CONTENTIONS: 15. The Learned Counsel for the Respondent contends that the instant Appeal revolves round only one issue i.e., Limitation Period and further that as per Section 18 of the Limitation act, 'An Acknowledgment of Liability' may be sufficient although it omits to specify the exact nature of the property or right or averse that time for payment, delivery, performance, enjoyment, has not arrived or is accompanied to refusal to pay, deliver, perform or permit to enjoy or is coupled with claim to set off or is addressed to a person other than a person who is entitled or right. 16. The Learned Counsel for the Respondent submits averse to t....
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....Debt' in its Financial Statement for the year 2013-17. 20. It is represented on behalf of the Respondent that the 'Corporate Debtor' had requested the 'IDBI Bank Ltd', from whom the Respondent obtained 'Assignment of Debt' for restructuring of the outstanding dues as per letter dated 09.04.2013. In reality, it is the stand of the Respondent that the 'Corporate Debtor' had proposed 'One Time Settlement' and addressed a letter to the Respondent on 30.03.2016 which was replied by the Respondent on the same date. Besides these, the 'Corporate Debtor' also addressed a letter dated 19.02.2018 and in favour of the Respondent for 'One Time settlement' of the 'Loan Accounts' which was granted by the Respondent, of course subject to the terms and conditions made mention of, in the Sanction Letter dated 28.02.2018. Furthermore, the 'Corporate Debtor' depending upon said settlement, made an upfront payment as seen in the 'One Time Settlement' letter by agreeing all the terms and conditions of the sanctioned, signed the said sanctions. 21. The Learned Counsel for the Respondent points out that the Appellant had acknowledged its liability in a consistent manner from the year 2013 upto 2018....
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....terms that give the Respondent a new 'Cause of Action' for initiating Corporate Insolvency Resolution Process as per IBC. As such, the Application projected by the Financial Creditor/Applicant before the Adjudicating Authority was well within the period of limitation. 27. The Learned Counsel for the Respondent cites the decision of the Hon'ble Supreme Court in the matters (1) "H.R. Basavaraj v. Canara Bank" [(2010) 12 SCC 458], (2) "Sasan Power Ltd. v. North American Coal Corporation (India) Pvt. Ltd." [(2016) 10 SCC 813] and "Delhi Development Authority & Anr. V. Joint Action Committee Allottee of SFS Flats" [(2008) 2 SCC 672] wherein it is held: "Section 62 gives statutory form to the common law principle of novation. The basic principle behind the concept of novation is the substitution of a contract by a new one only through the consent of both the parties to the same. Such consent may be expressed as in written agreements or implied through their actions or conduct. In other words, the novation of contract compromised of two elements. First is the discharge of one debt or debtor and the second is the substitution of a new debt or debtor. The novation is not complet....
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....on 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause;" 29. While summing up, the Learned Counsel for the Respondent contends that the 'Adjudicating Authority', after analysing the facts and circumstances of the case, had admitted the Application filed by the Respondent/'Corporate Debtor' by passing the Impugned Order which suffers no infirmity in law. 30. ACKNOWLEDGMENT OF LIABILITY: It is relevantly pointed out that 'An Acknowledgment of Liability' points out that an individual who acknowledges has some kind of interest, which is undoubte....
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....-Three Thousand and Nine and Paisa Eleven only) as on 31.03.2018 (vide Sanction Letter dated 17.02.2010) issued by IDBI Credit Facilities i.e., Cash Credit, Law of Credit and Bank Guarantee. Furthermore, as per Letter of Renewal of Credit Facility dated 16.03.2011 issued by IDBI Bank, Credit Facilities were renewed to the 'Corporate Debtor'. 35. It comes to known that the 'Debt' in question, along with all the rights, title and interest in the underlying 'Securities' and Guarantees were assigned by the Lender to the Financial Creditor based on 'Assignment Agreement' executed between the IDBI Bank and the Financial Creditor. 36. In fact, the computation of the due amount payable by the 'Corporate Debtor' to the Respondent/Financial Creditor (acting in its capacity as Trustee of EARC Trust SC-130) is described in the Tabular Column as under: Facility Principal Total as on 31.10.2014 Additional interest Additional Penal Interest Repayment Total dues as on 31.08.2018 Cash credit 6,49,96,454.72 10,29,94,086.70 7,77,32,482.49 1,05,39,685.42 62,29,106.90 18,50,37,147 LC (devolve d) 2,46,83,476.50 4,14,97,874.50 3,70,47,540.49 ....
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....ad acknowledged of debt in question. Moreover, the 'Corporate Debtor' made a request to the IDBI Bank, from whom the Respondent/Financial Creditor/Applicant secured the 'Assignment of Debt' for restructuring of the balance due amount as per letter dated 09.04.2013. 44. It is to be borne in mind that the Respondent/Financial Creditor/ Applicant had given a 'Reply' on 30.03.2016 for the proposed 'One Time Settlement' made by 'Corporate Debtor'. Continuing further, it is to be remembered that the Respondent/Financial Creditor had addressed Reply letter to the 'Corporate Debtor' dated 19.02.2018 for 'One Time Settlement' of the loan amount which was accepted by the Respondent based on Terms and Conditions specified in the Sanction Letter dated 28.02.2018. Apart from this, based on the said settlement, 'Corporate Debtor' had paid an upfront amount as seen from the 'One Time Settlement' letter by agreeing to abide by the Terms and Conditions of the 'Sanction Letter' and signed it. 45. It cannot be gainsaid that the Respondent/Financial Creditor, after considering the proposal of the Appellant for 'One Time Settlement' through its letter dated 19.02.2018 granted said settlement in a....