TaxTMI 
TaxTMI 
2022 (5) TMI 717
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....d by the Impugned Order by which the section 9 application under the Insolvency and Bankruptcy Code, 2016 (in short 'IBC') filed by the Appellant has been rejected by the Adjudicating Authority. 3. In brief, the facts of the case are that the Appellant, which is a sole proprietorship firm carrying on its business in engineering sector, performed flooring work on the Mezzanine floor of the plant of the corporate debtor at Fateh Nagar, Udhna. The Appellant has stated that the work order for the job under question was issued by the respondent company vide letter dated 12.07.2004. The Appellant completed the assigned work and was made some payments by the respondent. Regarding rest of the payment, it was informed by the Respondent Company vide fax dated 19.6.2007 that as per their ledger for the period 1.4.2003 till 30.09.2004, an amount of Rs. 39,00,631.50 (Rupees Thirty Nine Lakhs Six Hundred Thirty One and Paise Fifty Only) is owed to the Appellant. The Appellant has stated that the fact that the respondent company was declared a sick unit under the provisions of the Sick Industrial Companies Act, 1985 (hereinafter referred as 'SICA') and therefore, it performed the job assigned ....
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....de letter dated 21.10.2015, the acknowledgment and confirmation of the balance amount is akin to promise to pay and any written acknowledgment after the confirmation of the balance amount can safely be treated as a promise to pay and not mere acknowledgment, a principle which has been held in the matter of State Bank of India vs. Kanahiya Lal and Anr. (2016 SCC Online Del 2639). The Appellant's Learned Counsel has further claimed that the jural relationship that of debtor and creditor as laid down by Hon'ble Bombay High Court in the matter of Uma Kumar vs. Reunion Electrical Manufacturers (P) Ltd. (2006 SCC Online Bom 1291) was established hen the Respondent's employee noted receipt of Appellant's fax and letters and the onus for payment is therefore on the Respondent who has made a promise to pay. The Learned Counsel for Appellant has also urged that the provisions of the Limitation Act, 1963 are applicable to the IBC and with the promise to pay as included in section 25 (3) of the Indian Contract Act, 1872, a debt is not time-barred as there is a fresh promise to pay the amount. 7. The Learned Counsel for Appellant has argued in response to the allegations made by the Responde....
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....ection 9 application is barred on the ground of limitation. 11. The Learned Counsel for the Respondent has given the following reasons why the documents produced by the Appellant should be considered forged and fabricated: - (i) The letters allegedly issued by the Appellant on which the receipt of the Respondent's employee is shown pertain to the period of about 14 years, between 2005-2018, but they all have the same font and style which raises doubt that all the letters were printed around the same time. (ii) The alleged letters which bear dates upto 2017 contain the receipt signed by Mr. Janardan R. Devrukar, but the fact is that he had resigned from the Respondent No.1 company w.e.f. 31.10.2000 and later worked with the Respondent on contractual basis till 31.8.2008 only. Therefore, it is inconceivable that he would give receipt on a letter of Appellant for any dates after 2008, when he was no longer working with the Respondent company. (iii) The stamp-seal on the letters along with signature of receipt have the name of the city mentioned as Bombay even though the city's name had changed to Mumbai much earlier. (iv) Mr. Janardan R. Devrukar....
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....annot extend the period of limitation as required under section 18 of the Limitation Act. 13. The Learned Counsel for Respondent has also controverted the reliance placed by the Appellant on section 25 (3) of the Indian Contract Act, 1872 because this provision requires an express promise to pay and a mere alleged acknowledgement of debt, does not attract the said provision. He has contended that the extension of limitation of section 9 application has to be seen with the light of section 18 of the Limitation Act and therefore, limitation should be extended continuously through a series of acknowledgments starting from the year 2006, whereas the first acknowledgment purportedly in the letter dated 21.10.2015. He has also rebutted the claim of the Appellant that in view of the fact that the Respondent company was a sick company under Sick Industrial Companies Act, section 22 of the SICA cannot extend the period of limitation for initiating proceedings under IBC when the alleged debt did not form the part of the scheme before BIFR. He has finally urged that the section 9 application is clearly barred by limitation and therefore, the appeal should be dismissed. 14. On perusal of....
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....Debtor should be clear and unambiguous and only then it can be considered as an acknowledgment as required under section 18 of the Limitation Act for the purpose of extending limitation for an application under IBC. Moreover, in the said matter the acknowledgments that were under consideration where by way of balance sheets of the corporate debtor. 17. After this tribunal allowed application bearing No. TA 181 of 2021, the Respondent filed an affidavit dated 6.4.2022 along with Annual Reports for the year 2012-13 till the year 2017-18. These Annual Reports contained balance-sheets which give consolidated figures under various heads. The Respondent has also submitted that in terms of Rule 53 of the Companies (Management and Administration) Rules, 2014 read with the Companies Act, 2013, balance-sheets are required to be maintained for only 8 years from the date of filing with the Registrar of Companies. The Appellant has claimed that the Respondent has only filed its Annual Reports 2012-13 onwards till 2017-18 and which are incomplete as the Annual Reports do not have balance sheets showing break-up of consolidated figures under each head nor individual debtors' names listed. The ....
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....the limitation of section 9 application. Para 24 of this judgment states as follows:- "24. No doubt, there is a distinction between an acknowledgment under section 18 of the Limitation Act and a promise under Section 25(3) of the Indian Contract Act, inasmuch as though both have the effect of giving a fresh lease of life to the creditor to sue the debtor, but, for an acknowledgment under Section 18 of the Limitation Act to be applicable, the same must be made on or before the date of expiry of the period of limitation, whereas such a condition is non-existent, so far the promise under Section 25(3) of the Indian Contract Act is concerned....." Thus, it is clear that for the extension of limitation under section 18 of the Limitation Act, insofar section 9 application of the appellant is concerned, there has to be a clear acknowledgment of debt within 3 years from 19.6.2006 and mere promise to pay at a much later date, on 21.10.2015 cannot extend limitation as required under section 18 of the Limitation Act. 21. The Learned Counsel for Appellant has cited the judgment of Hon'ble Supreme Court in the matter of Asset Reconstruction Company Ltd. vs. Bishal Jaiswal & Anr. ....