TaxTMI 
TaxTMI 
2023 (9) TMI 821
X X X X Extracts X X X X
X X X X Extracts X X X X
....fly summarized as under: 2.1. The appellant entered into a leave and license agreement with Universal Premises and Textiles Private Limited The Universal Premises for the premises being Ground to 10th floor in the building named Solaris "C". A security deposit of Rs. 87,56,24,381/- was furnished by the appellant between the period 23.06.2007 to 03.11.2008. Universal Premises executed a simple mortgage without possession in favour of the appellant for seven floors on 06.11.2008. 2.2. On 02.05.2011, Universal Premises executed a sale deed in favour of Rajput Retail Ltd. RRL. The sale deed was for the land admeasuring 5123.90 sq. meters which included the land beneath the aforesaid building - Solaris "C" also. The Leave and License Agreements in favour of the appellant were duly acknowledged, reserved, and protected under the sale deed. 2.3. RRL, having availed credit facilities from the State Bank of India In short, "State Bank of India" (Respondent No.2), created an equitable mortgage on 29.06.2011 with respect to the land underneath the building-Solaris "C" to secure the said credit facilities. 2.4. In 2012, Universal Premises was merged with RRL under the orders ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay of 662 days and passed an order of admission and appointment of Interim Resolution Professional (IRP). 2.13. The IRP on 05.10.2021 published a notice as required under the IBC for commencement of the resolution process. 2.14. Before the Bombay High Court on 20.10.2021, the counsel for the Respondent No.2 filed a copy of the order dated 22.09.2021 admitting its petition under Section 7 IBC passed by the Adjudicating Authority. 2.15. The appellant, aggrieved by the order of admission dated 22.09.2021, preferred an appeal before the NCLAT under Section 61 of IBC which was registered as Company Appeal (AT) (Ins.) No.930 of 2021. By the impugned order dated 04.01.2022, NCLAT dismissed the said Company Appeal, giving rise to the present Civil Appeal. 3. This Court, while entertaining the appeal, issued notices on 01.04.2022 and passed an order of status quo. Pleadings have been exchanged and we have heard the learned counsel for the parties and perused the material on record. 4. Before proceeding further with the respective submissions, certain dates which were not mentioned by the appellant, however, the same having been disclosed by the respondent No.2, needs to be refer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Affairs, the Corporate Debtor was shown as an inactive company since 2016 with the last date of the AGM being 26.09.2016. c) Respondent No. 2 relied upon the Balance Sheet of the financial year ending 31.03.2015, in which the date was acknowledged by the Corporate Debtor and as such the limitation would run up to three years from the said date of the balance sheet, which would extend up to 31.03.2018, and it was on this premise that Respondent No. 2 made an application stating that the actual delay was not 1392 days but 662 days. d) Respondent No. 2, apart from declaring the Corporate Debtor as NPA on 28.06.2013, had further participated before the High Court of Bombay by moving applications objecting to the said proceedings, where it had failed. Section 7 petition was filed thereafter on 22.01.2020. e) Before the NCLAT, the Respondent No. 2 further improved its case by referring to an OTS proposal dated 16.02.2019 as an acknowledgement of the debt. However, this was objected to on the ground that even if it is assumed that the Corporate Debtor acknowledged the debt as per the Balance Sheet of the financial year ending 31.03.2015, the period of limitati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Appeal No. 3783 of 2020, iv. Vashdeo R. Bhojwani vs. Abhyudaya Co- Operative Bank Limited and Another 2019 (9) SCC 158, v. B.K. Educational Services Private Limited vs. Parag Gupta and Associates 2019(11) SCC 633, vi. Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Limited & Anr. 2020(15) SCC 1, vii. Ome Prakash Verma vs. Amit Jain & Anr. In CA(AT) (Insolvency) No. 827 of 2020 passed by NCLT, (Principal Bench, Delhi), viii. Insolvency Law Report March 2018, ix. Rajendra Narottamdas Sheth and Another vs. Chandra Prakash Jain and Another (2022) 5 SCC 600, x. Gopal Sardar vs. Karuna Sardar (2004) 4 SCC 252, and xi. Serish Maji vs. Nishit Kumar Dolui 1999 SCC Online Cal 58. 7. On the other hand, Shri N. Venkataraman, learned Additional Solicitor General appearing for Respondent No. 2, in addition to the list of dates mentioned by the appellant, referred to the short list of dates in support of his arguments. Some of these dates are in addition to the list of dates mentioned and already incorporated in the earlier part of this order. A brief reference to the said dates relied upon by the Resp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for counting the limitation, the same continued to be extended in view of the developments subsequent to the said declaration of NPA, which entitled the Respondent No.2 to the benefit of Sections 5, 14 and 18 of the Limitation Act. n) There being repeated acknowledgments, not only by way of the debt being reflected in the balance sheet, but also repeated proposal for one-time settlement by the Corporate Debtor, which extended the limitation, Respondent No.2 would be entitled to the benefit of Section 18 of the Limitation Act. o) The NCLT as also the NCLAT rightly rejected the objection taken by the appellant regarding the petition being time-barred and further rightly proceeded to admit the petition under Section 7 of the IBC by initiating the CIRP. The appeal, being devoid of merits is liable to be dismissed. p) Reliance was placed upon the following judgements by learned senior Counsel appearing for Respondent No.2, in support of his submissions: (i). Kotak Mahindra Bank Limited vs. Kew Precision Parts Private Limited and Ors (2022) 9 SCC 364, (ii). Asset Reconstruction Company (India) Limited vs. Bishal Jaiswal and Another (2021) 6 SC....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation.-For the purposes of this section,- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right, (b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and (c) an application for the execution of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the date of acknowledgment of debt in the balance sheet. c) The second OTS proposal is dated 1st January, 2018, again within a period of three years from the date of the first OTS proposal. d) The third OTS proposal is dated 16th May, 2019, once again within a period of three years from the date of the second OTS proposal. 15. The petition under Section 7 was filed on 22nd January, 2020 within three years from the date of the first, second and the third OTS proposals. 16. The question for consideration would be whether the debt acknowledged in the balance sheet of the financial year would end on 31st March, 2015 and whether the three OTS proposals would give a fresh life of limitation of three years from each of the respective dates. Section 18 of the Limitation Act is the provision on which strong reliance has been placed upon by the Respondent No.2 for seeking such extension of limitation. 17. A plain reading of Section 18(1) of the Limitation Act would reflect that where any acknowledgment of a liability has been made in writing by the party against whom any right is claimed, a fresh period of limitation would be computed from the time when the ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n filed beyond a period of 3 years from the date of declaration of the loan account of the corporate debtor as NPA, even though the corporate debtor might subsequently have acknowledged its liability to the appellant Bank, within a period of three years prior to the date of filing of the petition under Section 7 IBC, by making a proposal for a one-time settlement, or by acknowledging the debt in its statutory balance sheets and books of accounts." 22. Ultimately, in paragraph 142 of the report, it was held that additional documents could be introduced at the stage of appeal also. The said para is reproduced hereunder: "142. There is no bar in law to the amendment of pleadings in an application under Section 7 IBC, or to the filing of additional documents, apart from those initially filed along with application under Section 7 IBC in Form 1. In the absence of any express provision which either prohibits or sets a time-limit for filing of additional documents, it cannot be said that the adjudicating authority committed any illegality or error in permitting the appellant Bank to file additional documents. Needless however, to mention that depending on the facts and circums....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Debtor being not questioned by the suspended Directors, there is no reason to disbelieve or to cast any doubt on the said documents at the instance of the appellant. 27. The case laws relied upon on behalf of the appellant are on three points as already noted above. The same are briefly discussed hereunder: (a) First point on which case laws have been referred to is that a time barred application cannot be entertained under Section 7 IBC. The same would not be relevant or of any help to the appellant as it has already been held that the application of Respondent No.2 would be entitled to benefit of Sections 5 and 18 of the Limitation Act and, therefore, was within time. (b) The second point on which case laws have been referred to was that no benefit could be claimed under Section 14 of the Limitation Act. These case laws are also not of any relevance as it has been held above that no benefit could be claimed by Respondent No.2 under the said provision. (c) The third point on which case law is relied upon is that for benefit under Section 18 of the Limitation Act, the acknowledgment should be made within expiry of the limitation provided under law. On ....