TaxTMI 
TaxTMI 
2022 (1) TMI 165
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...., 1963 2. Brief facts of the case and sequence of the events, which necessary to be noted for deciding this Appeal are: (i) The State Bank of India granted credit facilities/ term loans vide letter dated 22.08.2010, 26.11.2010 and 24.11.2011 to the Corporate Debtor - Shreem Corporation Limited. The Corporate Debtor had executed various Agreements and Deed to secure the above credit facilities/ term loans. (ii) The account of Corporate Debtor was classified as Non-Performing Asset (NPA) on 28.06.2013. (iii) The State Bank of India issued notice under Section 13 sub-section (2) of SARFAESI Act, 2002. An Application being O.A. no.726 of 2014 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was filed by the State Bank of India against the Corporate Debtor before the Debt Recovery Tribunal. (iv) State Bank of India also filed Application under Section 14 of the SARFAESI Act, 2002 for taking physical possession for certain secured assets, which was allowed by the District Magistrate by order dated 09.03.2017. (v) In the balance sheet of the Corporate Debtor for the year ending 31st March, 2015, the debt liability of the Financial Cred....
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....t Applicant having acted with due diligence and have shown sufficient cause to condone the delay of 662 days, which is less than two years, the delay was condoned on payment of Rs. 6,00,000/- to be paid in Bharat Kosh by the Bank. 4. The present Appeal has been filed by Axis Bank Limited, which was not a party before the Adjudicating Authority in Application under Section 7 of the IB Code. The Appellant's case in this Appeal is that the Appellant on leave and license basis had taken 11 floors of the building Solaris 'C' on the immovable property namely situated at Survey No.46(pt), 47(pt) and bearing city survey No.98(A), 98(A) PT, 100(1), 101(1), 100(1), 101/1 totally admeasuring 5213.90 sq. meters lying at Village Tungwa, Taluka Kurla, Sakivihar Road, Andheri (E), Mumbai. The property was owned by Universal Premises and Textiles Limited, which in the year 2012 merged with Rajput Retail Limited, which was renamed as Shreem Corporation Limited - the Corporate Debtor. In the year 2010 Rajput Retail Limited availed credit facilities from State Bank of India and created equitable mortgage of the land beneath the building Solaris 'C' in favour of State Bank of India to secure the cred....
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....submission, which has been raised by the learned Counsel for the Appellant is that delay in filing the Application was 1392 days and Adjudicating Authority has wrongly computed the delay as 662 days. The Adjudicating Authority has noted the fact that in filing the Application under Section 7, there was delay of 1392 days. However, a finding has been returned in paragraph 33 of the judgment relying on the balance sheet for the year 31st March, 2015 filed by the State Bank of India before it, where liability of the Financial Creditor is shown. The Adjudicating Authority has taken a view that fresh period of limitation shall accrue from 31st March, 2015 and continues till 31.03.2018, therefore, the period of delay is reduced from 1392 days to 662 days. 8. We fully endorse the above view of the Adjudicating Authority. An acknowledgement of liability in balance sheet is the acknowledgement within the meaning of Section 18 of the Limitation Act, which is no more res-integra. 9. We may refer to the judgment of Hon'ble Supreme Court in Asset Reconstruction (India) Company Ltd. Vs. Bishal Jaiswal and Dena Bank (now Bank of Baroda) Vs. C Shivkumar Reddy and Anr., where it has been held tha....
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.... that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the "State" which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State....
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.... decision consumes considerable time is a known feature. Following principles have been laid down by the three Judge Bench for finding out "sufficient cause", in paragraph 4 and 11 following has been laid down: "4. The learned counsel appearing on behalf of the appellants have argued, relying upon the Report of the Insolvency Law Committee of March 2018, that the object of the Amendment Act which introduced Section 238-A into the Code was to clarify the law and, thus, Section 238-A must be held to be retrospective. Further, according to them, in any case, the law of limitation, pertaining to the domain of procedure, must be held to apply retrospectively in any case. For this proposition, they cited several judgments which will be referred to later in this judgment. They also referred to and relied upon the definitions under Sections 3(11), 3(12) and Section 5(6) of the Code, which, when contrasted with Section 3(6), would show that though "claim" in Section 3(6) refers to a right to payment, the definitions of "debt" and "default" in Sections 3(11) and 3(12) respectively, refer to liability or obligation in respect of a claim which is "due" and this being the case, a time-barred ....
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....ch may potentially be a part of the resolution plan. Such a resolution plan restructuring time-barred debts and claims may not be in compliance with the existing laws for the time being in force as per Section 30(4) of the Code. 28.3. Given that the intent was not to package the Code as a fresh opportunity for creditors and claimants who did not exercise their remedy under existing laws within the prescribed limitation period, the Committee thought it fit to insert a specific section applying the Limitation Act to the Code. The relevant entry under the Limitation Act may be on a case-to-case basis. It was further noted that the Limitation Act may not apply to applications of corporate applicants, as these are initiated by the applicant for its own debts for the purpose of CIRP and are not in the form of a creditor's remedy." 13. We may also notice the judgment of Apex Court in B.K. Educational Services Private Limited vs. Parag Gupta and Associates (2019) 11 SCC 633 where while considering the applicability of Limitation Act in IBC, the Hon'ble Supreme Court held that provisions of Limitation Act will be applicable to applications filed under Section 7 and 9 of the Code, fo....