TaxTMI 
TaxTMI 
2022 (7) TMI 525
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....or' observing as follows: "30. It is seen that the Applicant has initiated proceedings before District Magistrate and The Debts Recovery Tribunal within the period of limitation and by virtue of orders passed in these proceedings, deposits have been made in the loan accounts in 2018. The Application is well within the period of limitation. 31. The Applicant has annexed the Commercial Credit Information Report of the Corporate Debtor issued by TransUnion CIBIL, showing that the Corporate Debtor's account is classified as "doubtful'. 32. The Corporate Debtor's email dated 27.02.2018 providing the revised One time settlement proposal is in itself admission of its liability to repay amounts above Rupees One Lakh. The default of financial debt and its admission is found in the Reply, and the email annexed to the Reply in addition to the orders passed in various proceedings. 33. It is established that the Corporate Debtor owes financial debt above a sum of $1,00,000/- and the default is established on perusal of the Commercial Credit Information Report of the Corporate Debtor and the Balance Sheet. 34. In this regard, it is imperat....
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....ea of extension of Limitation or 'acknowledgement of debt' under Section 18 of the Limitation Act, and therefore cannot now agitate this plea at such a belated stage. It is contended by the Learned Counsel that the additional documents sought to be placed in I.A. 455/2021 is only to support its belated plea of extension of Limitation and cannot be permitted at the appellate stage. Morever, the same can be admitted only if conditions under Order 41 Rules 27, 28 & 29 of CPC are complied with. 5. Briefly put, Bank of Baroda has extended financial assistance to the 'Corporate Debtor' through various term loans for an amount of Rs.9,91,00,000/- a lone recall Notice dated 08.10.2013 under Section 13(2) of the SARFAESI Act, 2002 was issued demanding payment of Rs.6,11,42,097/-. On 30.09.2016, the Debt Recovery Tribunal ('DRT') allowed the Bank to recover a sum of Rs.50,00,000/- and thereafter a sum of Rs.20,00,000/- towards interest. It is the case of the Respondent Bank that a One Time Settlement ('OTS') dated 27.03.2018 was entered into between the parties. It is not in dispute that an OTS proposal was extended vide Order dated 07.03.2018 which the Bank vide letter dated 27.03.2018 h....
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....s NPA. Further, the expression "default" has been defined in Section 3(12) to mean non-payment of "debt" when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be. In cases where the corporate person had offered guarantee in respect of loan transaction, the right of the financial creditor to initiate action against such entity being a corporate debtor (corporate guarantor), would get triggered the moment the principal borrower commits default due to non-payment of debt. Thus, when the principal borrower and/or the (corporate) guarantor admit and acknowledge their liability after declaration of NPA but before the expiration of three years therefrom including the fresh period of limitation due to (successive) acknowledgments, it is not possible to extricate them from the renewed limitation accruing due to the effect of Section 18 of the Limitation Act. Section 18 of the Limitation Act gets attracted the moment acknowledgment in writing signed by the party against whom such right to initiate resolution process under Section 7 IBC ensures. Section 18 of the Limitation Act would come in....
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.... 139. Section 18 of the Limitation Act cannot also be construed with pedantic rigidity in relation to proceedings under the IBC. This Court sees no reason why an offer of One Time Settlement of a live claim, made within the period of limitation, should not also be construed as an acknowledgment to attract Section 18 of the Limitation Act. In Gaurav Hargovindbhai Dave (supra) cited by Mr. Shivshankar, this Court had no occasion to consider any proposal for one time settlement. Be that as it may, the Balance Sheets and Financial Statements of the Corporate Debtor for 2016-2017, as observed above, constitute acknowledgement of liability which extended the limitation by three years, apart from the fact that a Certificate of Recovery was issued in favour of the Appellant Bank in May 2017. The NCLT rightly admitted the application by its order dated 21st March, 2019. 140. To sum up, in our considered opinion an application under Section 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 t....
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....lement proposal dated 07.03.2018 was accepted by the Bank on 27.03.2018, wherein a timeline was provided for the payment of the balance amount. We are of the considered view that the OTS proposal dated 01.08.2016 filed vide I.A. 1155/2016 falls within the ambit of 'acknowledgement of debt' as defined under Section 18 of the Limitation Act, 1963, which is further fructified by the admitted OTS dated 27.03.2018 again within three years of the previous proposal where the 'debt' is acknowledged to be 'due and payable'. Therefore, we are of the view that the ratio of the Hon'ble Supreme Court in 'Dena Bank (now Bank of Baroda)' Vs. 'C. Shivkumar Reddy and Anr.', (2021) 10 SCC 330, is squarely applicable to the facts of this case as there is a jural relationship between the 'Corporate Debtor' and the Respondent Bank and there is an 'acknowledgement of debt' vide the OTS dated 27.03.2018, which falls within the ambit of Section 18 of the Limitation Act, 1963. 13. The Resolution Professional filed the Status Report stating that on 11.08.2020 a third CoC Meeting was held whereby it was taken into consideration that the 180 days CIRP period was coming to an end and having deliberated upon....
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....f consent fernis to be filed in Hon'ble DRT. Consent terms with default olauso to be ille in DRT, Mumbal and consent decree to be obtained, Recovery proceedings to be kept in abeyance till full and final settlement, including interest, wider this settlement. On acceptance of compromise sunetion, the borrowers and the Quarantors should withdrmy all cases filed by them (If any) against the Bank und oficials. They should also give an undertaking that they shall not Me any case gainst the Bank or its official in future. All the relief/concussion given under subject compromise shall be withdrawn and entire contractual dues shall become payable by the Company, If the Company falls to bonour any of the terms and conditions of compromise. whether fully or perilally. The decision of the Bank in this regard shall be conclusive und binding on the Company. 9. Any default in compliance of any of the terms and conditions stipulated herein above will be treated as definit and which will result in termination of sanction uutomatically and Beuk will proceed to recover the dues through appropriate legal/recovery action without any notice to the C....