TaxTMI 
TaxTMI 
2022 (9) TMI 1068
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.... appropriate order to set aside and quash the impugned admission order dated 13.03.2020 (communicated on 01.07.2020) passed by the Hon'ble AA, Ahmedabad (Indore Bench) in the case of TP No. 152 of 2019 [CP (IB) No. 99 of 2019)], and be pleased to pass order releasing the Corporate Debtor from the rigor of 'Corporate Insolvency Resolution Process'. etc". 3. It is the case of the Appellant that the IDBI has provided financial assistance to the Corporate Debtor (Hotline Glass Ltd.)/R-2 in the form of restructuring and private placement of Non-Convertible Debentures (NCD) amounting to Rs. 31.71 Crore allotted on 24.03.1999 pursuant to sanction letter dated 18.02.1999 (appeal paper book page 56). 4. R-1/(SASF) has got the assignment in its favor from IDBI. Total amount of debt as per Form no. I- application made by financial creditor to initiate CIRP appearing at pg- 54 filed under Section 7 of the Code reflects total amount of debt disbursed Rs. 31.71 Crore on 24.03.1999. The corresponding Sanction Letter is dated 18.02.1999, letter no. is CFD-III/HGL/4082 issued by IDBI. The amount claimed to be in default as reflected....
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.... "Gaurav Hargovindbhai Dave vs. Asset Reconstruction Co. (India) Ltd." (2019) 9 SCC 158. " Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr." (2020) 15 SCC 1. (f) It was also stated by the Ld. Counsel for the Appellant that the period during which the proceedings were pending before the BIFR cannot extend/ be excluded for computing limitation period. He went on to further clarify even if the said period is excluded i.e. the period from 20.01.2007 till 14.05.2012, no recovery action was taken by the R-1 for 616 days prior to filing of second reference before BIFR. However, the second reference was registered by BIFR on 21.01.2014. (g) The Ld. Counsel for the Appellant stressed that even if we exclude the period before second reference to BIFR from 21.01.2014 till 01.12.2016 no recovery action was taken by Respondent no.1 for 778 days. From the date of abatement of BIFR proceeding as the petition under the Code has been filed only on 19.01.2019. No action was taken by R-1 for 1394 days, this clearly reflects that the application is hopelessly time barred. (h) The Respondent no.1 /Financial Creditor cannot seek any b....
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....ions in view of OTS Letter/Approval. Thus, period of limitation further extends to a period of 03 years from 20.04.2005 till 20.04.2008. 17.08.2006 Respondent No. 1 withdrew the Settlement Package provided under as per OTS Sanction Letter dated 20.04.2005, since Corporate Debtor failed to comply with the terms and conditions thereof. (Annexure- R/6 @ Pg. No. 162; Vol I of Reply) 26.02.2007 Corporate Debtor filed Reference under Section 15 of the SICA, 1985, bearing Ref. Case No. 20/2007 ("First Reference"), before the Board for Industrial and Financial Reconstruction ("BIFR"). In Form-A, as required for filing Section 15 Reference under SICA, filed by the Corporate Debtor before BIFR, Corporate Debtor records and acknowledges-in-writing its dues/outstanding against the Respondent No.1 (Annexure-R/12 @ Pg. No. 187; Vol I of Reply) N.B. Prior to the expiry of limitation (on 20.04.2008), Corporate Debtor accepts and acknowledged-in-writing its obligations under the Form-A dated 26.02.2007. Thus, period of limitation further extends to a period of 03 years from 26.02.2007 till 26.02.2010. 17.06.2008 Respondent No. 1 issued statutory notice under Section 13(2) of SARFA....
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.....08.2011), Corporate Debtor accepts and acknowledges-in-writing its obligations in ABS dated 12.08.2011 for FY 2010-11 (as on 31.03.2011). Thus, period of limitation further extends to a period of 03 years from 12.08.2011 till 12.08.2014. 14.05.2012 First Reference Case was again dismissed by BIFR. N.B. During pendency of First Reference Case before BIFR (both round of litigation) and Appeal before AAIFR (from 26.02.2007 till 14.05.2012), in view of Section 22 of SICA, Respondent No. 1 was prevented from taking any recovery measures in respect of the Corporate Debtor. 16.06.2012 Corporate Debtor filed before the BIFR which was registered as Case No. 06/2014 ("Second Reference Case"). In Form-A dated 16.06.2012, as required for filing Section 15 Reference under SICA, filed by the Corporate Debtor before BIFR, Corporate Debtor records and acknowledges-in-writing its dues/outstanding against the Respondent No.1. (Annexure-R/13 @Pg. No. 198; Vol I of Reply) 30.08.2013 In view of ABS dated 30.08.2013 for FY 2012-13 (as on 31.03.2013), Corporate Debtor has acknowledged its debt owed and payable to Respondent No. 1 (Annexure-R/14 @ Pg. No. 282; Vol II of Reply) N.B. Prio....
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....ched to settle the debt owed to R-1 by expressly acknowledging its liability towards R-1. (c) The Ld. Counsel also took us through various references and correspondence between R-1 & 2/ Corporate Debtor and the same are appearing at Affidavit in Reply Paper Book from page - 160 to 210 furnished to the NCLAT vide diary no. 49730 dated 06.12.2021. 11. The Adjudicating Authority has admitted the present petition under Section 7 of the Code after making following observations which is quite elaborate and illustrative as follows: "22. The crucial point of limitation involved in this present I.B. Petition needs consideration and to be dealt with by this Court in the light of the Law settled by the Hon'ble Supreme Court and judicial precedents applicable. 23. It is now undisputed legal position that, while, filing the present Petition under Section 7 of the I.B. Code, only article 137 of the Limitation Act would attract which provides that the application can be filed within three years from the right to sue accrue i.e. the date of default from the date of non-performing asset declared by the lender bank. 24. Undisputedly, in the present matter, the ....
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.... pending under the provision of SICA Act stood abated. Therefore, the commencement of limitation for the present matter would start from the date acknowledgment for debts due and payable under one time settlement, i.e. 26.08.2008 (the date of reply admitting of debt) or 20.04.2005 the date of OTS which was assured to be complied with by the Corporate Debtor. Further, the period spent in during the pendency of SICA proceedings is required to be excluded. It is further found that the present petition is field within the remaining period of three years from 01.12.2016. Admittedly, the Petitioner/ Financial Creditor has filed the present petition on 10.01.2019, which is found to be filed within three years after exclusion of such period consumed in the SICA proceedings. Hence, the present petition is maintainable before this Adjudicating Authority. 27. Further, the Learned Counsel appearing for the Petitioner Bank drew our attention to the decision of co-ordinating Bench of NCLT, New Delhi having similar circumstances wherein, the NCLT, New Delhi took a view that such period needs to be excluded for the purpose of counting limitation and thus it pleased to admit the petition s....
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....ubmissions made by both the Counsels. Respondent contends that the date of default in the present case is 01.04.2000 and 03.04.2000 and yet the petitioner is mute about the steps taken by IDBI and the petitioner during the period 2000 to 2019 for seeking recovery of the alleged dues. While going through the documents Tribunal observed that based on the balance sheet of corporate debtor as on 31.12.2006 filed an application under Section 15(1) of Sick Industrial Companies Act, 1985 before BIFR in January 2007 which was admitted as case no. 09/2007 and was pending before BIFR till the SICA Act, 1985, was repealed and in view of the applicant could not take any steps against the corporate debtor for recovery. Further, SICA has been repealed by way of a notification dated 25.11.2016 published by the Government of India with effect from 01.12.2016 and thus the BIFR established under the provision of SICA was also abolished. As per Section 22(5) of SICA (since repealed), period from 15.01.2007 to 30.11.2016 is to be excluded for the purpose of limitation. Between 2004 to 2007 it is also seen that dispute settlement was arrived, however the same stood withdrawn subsequently. Thus "Right t....
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....d to be repaid within the framework of available law of the land. The Code is also having the purpose for resolution of the insolvency process. (vi) The Corporate Debtor has acknowledged in writing in its Balance Sheet till 2018 debt outstanding and owed to R-1. In between also the Corporate Debtor has repeatedly accepted and acknowledged in writing its obligations from 19.03.2005 till 26.08.2008 (as stated supra in the table) which itself has extended the period of limitation till 26.08.2011 and concurrently further extended by the acknowledgment by Corporate Debtor in its Balance Sheet till 31st March 2018 duly signed by Appellant as Director and Chartered Accountant on Sept. 4, 2018 (Page No. 349- Affidavit in Reply of R-1). (vii) The Hon'ble Apex Court in its Judgment in Civil Appeal Nos. 84-85 of 2020 in "Asset Reconstruction Company (India) Ltd. vs. Tulip Star Hotels Ltd. & Ors." 2022 SCC Online SC 944 decided on 01.08.2022 has settled the issue in paragraph 85 and 97 of the Judgment as depicted below: "85. It is well settled that entries in books of accounts and/or balance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of th....
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....fied in primarily by the Interim Resolution Professional/Resolution Professional followed by the scrutiny and approval by Committee of Creditors and its acceptance by the Adjudicating Authority. (xi) Hence, there is no iota of doubt that the debentures being a long term borrowing a debt under Section 5 (8) has depicted below: "Financial debt" means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on nonrecourse basis; (f) any amount raised under any other tran....