TaxTMI 
TaxTMI 
2024 (2) TMI 1315
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....23 among other things at paragraph No. 19 to 21, had observed the following:- "19. As far as the issue before us, on perusal of the records, we found that the IBA/01/KOB/2020 was initiated against the Corporate Debtor/Principal Borrower on 15.10.2020 by this Tribunal. Subsequently, the Corporate Debtor filed an appeal Hon'ble NCLAT and as per the order dated 09.11.2021, the Hon'ble NCLAT granted 6 months' time period for settling the entire liability between the Financial Creditor and Corporate Debtor. It is also seen that the Corporate Debtor filed OTS proposals admitting the liability on 14.01.2022 and 19.03.2022 and sought time for settlement. But the Corporate Debtor did not comply with the direction of the Hon'ble NCLAT and due to the same reason, the Financial Creditor approached this Tribunal by filing CP(IBC)/46/KOB/2022 which was admitted by this Tribunal vide order dated 25.01.2023. Therefore, there is a continuous cause of action and we could come to a conclusion that the Company Petition has been filed within the prescribed period of limitation. Hence the contention taken by the Corporate Debtor regarding limitation has no force. 20. Issue No. iii . As there is a de....
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.... grass on the sprawling 55 acre Leasehold property taken from 'Bekel Resort Development Corporation Ltd.' (BRDCL), Government of Kerala, bearing leasehold costs, and from the other side, made an investment of Rs. 126.60 Crore on the project of setting up Resorts on the Beach side, and paying interest costs of Rs. 61.40 to the Banks alone. 6. It is represented on behalf of the Appellant that despite all this hardship, the Appellant Group has never ceased their efforts to maintain servicing of the loans taken from the State Bank of India, Union Bank of India, (Financial Creditor Bank) and Dhanlaxmi Bank. But, owing to the delay that had occurred unfortunately, in completing the project, the group in the year 2015 had failed to service the Loan of Banks, which led 'GGL' into this Financial Crisis. 7. The Learned Counsel for the Appellant points out that as 'GGL' still investing in the project without any returns, it could not come out of the financial crisis and looking at this situation and as per their procedures, the bankers(Union Bank of India) and Dhanlaxmi Bank having authorized the State Bank of India to proceed against 'GGL' for realizing the dues outstanding, the State Bank....
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....22 (under Section 7 of the I&B Code, 2016 against GGL, claiming Rs. 39,78,12,079/- wherein the Adjudicating Authority / Tribunal, Kochi on 25.01.2023 initiated the 'Corporate Insolvency Resolution Process' by admitting the Company Petition. 12. According to the Appellant, the Respondent/Bank filed a petition u/s 7 of the I&B Code, 2016 against the Corporate Debtor/Corporate Guarantor on 18.07.2023 claiming Rs. 42,87,27,148/- against the claim of Rs. 39,78,12,079/- admitted against GGL. Although, the Respondent/Bank filed a case against a 'GGL' as well as the Corporate Debtor, the Appellant's group never gave up its endeavours in requesting the Respondent/Bank to settle this claim. 13. The Learned Counsel for the Appellant points out that the 'GGL' as soon as this Authority gave directions to settle it within six months the Appellant on 05.10.2021, 04.02.2022, 19.03.2022, 21.11.2022, 13.02.2023, 04.09.2023 and lastly on 18.09.2023 increased its 'One Time Settlement Proposal' to a sum of Rs. 11 crore. 14. According to the Appellant, the Respondent/Bank in line with the correspondence dated 06.12.2021, 01.02.2022, 21.03.2022, 02.12.2022, 20.02.2023, 13.03.2023 and on 20.09.2023 the....
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....gainst GGL, also State Bank of India filed a separate CP(IB)/43/KOB/2021 before the same Bench against GGL as a matter of fact, the Appellant Group had settled the account of State Bank of India by paying Rs. 28 crore against the outstanding of Rs. 56.29 crore and a no due certificate was issued by the State Bank of India on 12.05.2022 stating that the Loan Account of GGL was closed on receipt of the sum aforesaid as per compromise settlement. Resultantly, two Company Petitions were filed against GGL and its personal guarantor were withdrawn by State Bank of India on 24.05.2022 and 30.05.2022. 19. According to the Appellant, he entered into a One Time Settlement with Dhanlaxmi Bank for Rs. 11.88 crore out of the OTS agreed, the Appellant Group made a part payment of Rs. 1.5 crore and for the payment of balance acknowledgement from the Corporate Debtor after 29.12.2017, the claim against the Appellant herein, is barred by Limitation. 20. It is projected on the side of the Appellant that the Appellant had mentioned in the Reply to the Company Petition that the impugned order, passed by NCLAT on 09.09.2021 against the order of the Adjudicating Authority / Tribunal dated 15.10.2020 w....
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....low the petition, without answering the point of Limitation'. 26. According to the Appellant, the Adjudicating Authority/ Tribunal in Neelkant Township and Construction Ltd. V. Urban Infrastructure Trustee Ltd. (Vide Comp. App. (AT) (Ins.) 44 of 2017) had dealt with the Limitation point separately to say that the Limitation Act, 1963 is inapplicable to the I&B Code, 2016 because the 'Code' is not for Recovery of the 'Money Claim' and the submissions of the Corporate Debtor were not accepted by the Adjudicating Authority/Tribunal, in regard to the Limitation aspect in filing Section 7 petition before the Adjudicating Authority/ Tribunal. In fact, the Adjudicating Authority/ Tribunal had made an erroneous observation without looking into the amendment dated 06.06.2018, applying a Limitation Act to the Code. 27. The Learned Counsel for the Appellant submits that the Corporate Debtor had avoid a general term loan of Rs. 25 Crores on 12.06.2010 from the Respondent/Financial Creditor, which was later Renewed/Restructured and modified on various dates. Also that the Respondent/ Bank had filed IBA/ 01/KOB/2020 before the Adjudicating Authority/ Tribunal which was admitted on 15.10.2020. ....
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....nt in writing by the Principal Debtor of the amount of indebtedness of the Principal Debtor or otherwise as in relation of the subject matter of this guarantor, shall be binding on me/us and I/We accept the correctness of any statement of account served on the Principal Debtor which is duly certified by any Manager or Officer of the Bank and the same shall be treated as my/our duly authorized agent for purpose of Indian Limitation Act, 1963." 32. The Learned Counsel for the Appellant points out that the Adjudicating Authority/ Tribunal had referred to a decision in Manmohan Singh Jain V. M/s State Bank of India & Anr. (vide Comp. App. (AT) (CH) (Ins.) 97 of 2021) to say that the non- mentioning of the 'Date of Default' in Part-IV of the application in Form-1 was 'not fatal', to an Application under Section 7 of the Code wherein the Appellate Tribunal, relied upon the decision in Surendra Trading Co. V. Juggilal Kamlapat Jute Mills Company Ltd. & Ors. (2017) 16 SCC 143 stating that the prescribed period of 7 days for curing the defect, as per Section 7(5) of the Code and 14 days specified for adjudication of an 'insolvency petition' as mentioned in Section 10(4) of the I&B Code, 20....
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....ed/ running, as mentioned in Section 9 of the Limitation Act, 1963 it will not stop running, unless a factual situation governed by the Limitation Act had occurred. 38. According the Appellant in the present case, having the creditor' invoked the Guarantee on 29.12.20217 by mentioning that the Limitation will be reckoned from the date of receipt of the notice dated 29.12.2017 the actions and acknowledgment between the Lender and the Principal Borrower will not save the 'Limitation period' already begun against the 'Guarantor/ Corporate Debtor' and hence, the Limitation has begun from 29.12.2017 and hence, the decision in Surana's case is inapplicable to the present Appeal. 39. The Learned Counsel for the Appellant, points out that the 'Demand' made against the Appellant on 29.12.2017, to 'pay the dues' payable by the 'Principal Borrower', the Appellant, having not paid either part payment or acknowledge the liability against it, at any point of time after 29.12.2017, the Respondent/ Bank ought to have explained how this 'default date' 09.03.2022 has come into existence and the 'Bank' and the 'Tribunal' had not any endeavor to deal with this default date not being supported by any....
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.... According to the Appellant, the Appellant had settled with a Respondent/ Bank viz. Rs. 23,60,84,595/-, 95% of the principal amount was already settled. The Appellant had now offered the one-time settlement of Rs. 14 Crores and with this proposed settlement the Corporate Debtor intends to settle the whole principal amount, as well as significant portion of interest, being beneficial to the respective parties. 46. The Learned Counsel for the Appellant points out that though the intention of I&B Code, 2016 is Resolution, the Respondent/Bank is rejecting all the OTS proposal with vengeance and push the Corporate Debtor into Liquidation and ATE (Corporate Guarantor) to Liquidation. In fact, the Corporate Debtor had invested more than Rs. 185/- crores and when the Company is pushed into Insolvency, all the amounts invested by the promoters will go to drain. 47. According to the Appellant, the intention of the promoters, is to settle the 'entire dues' and the dues of State Bank of India and Dhanlaxmi Bank were settled and serious endeavors are made to settle the Respondent/ Bank also and the Corporate Guarantor/ Appellant request this 'Appellate Tribunal' to grant six months time to th....
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....bunal which was numbered as Comp App (AT) (Ins.) 70 of 2023 and on 29.03.2023, in Appeal an order was passed affirming the CIRP against the Principal Borrower. 52. It is brought to the fore on behalf of the Respondent/Bank that the Committee of Creditors had unanimously has resolved to liquidate the Principal Borrower and IA IBC/462/KOB/2023 was filed in CP (IB) 46/KOB/2022 by the Resolution Professional before the Adjudicating Authority/ Tribunal and on 24.11.2023 a liquidation order was passed against the Principal Borrower. The Corporate Debtor/ M/s Air Travels Enterprises India Ltd. and the Appellant E.M. Nazim Ellias Mohamed had assailed the order of liquidation in Comp. App. AT (Ins.) 564/ 2023. The Appeal came to be dismissed preferred by the Appellant and the order of Liquidation was upheld. Therefore, on the basis of confirmation of the order of CIRP and Liquidation it is proved beyond that the Principal Borrowers commission of default was validated by the Competent Authorities. 53. It is represented on behalf of the Respondent/Bank that M/s Air Travel Enterprises India Ltd., stood as a Corporate Guarantor in respect of the Loans availed by the Principal Borrower had dul....
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....onsiderable investment was required for completion of the project. On 10.08.2023, Principal Borrower had executed a letter revising the proposal of OTS for Rs. 10 crores. On 18.09.2023 the Principal Borrower had written a letter to the Respondent / Bank increasing their offer to Rs. 11 crores. On 05.10.2023 a letter of the Principal Borrower was addressed to the Respondent / Bank mentioning that the Borrower had remitted Rs. 1.10 crore, 10% of the settlement offer of Rs. 11 crores. The Principal Borrowers audited Financials for the year ending 31.3.17, 31.3.18, 31.3.19, 31.3.20, 31.3.21,31.3.22 indicate that the acknowledgement of debts by the Principal Borrower. 57. The Ld. Counsel for the Respondent/ Bank points out that the acknowledgments will demonstrate that the application filed by the Respondent/ Bank is within the period of limitation and the Plea of the appellant that the claim being barred against the Corporate Debtor is an incorrect one. 58. The Learned Counsel for the Respondent/ Bank submits that once it is clear that the default committed by the Principal Borrower which was accepted by this Tribunal in Comp. App. (AT) (Ins.) 70 of 2023 (dated 29.03.2023) and in Com....
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....iod of limitation. We thus find no substance in the submission of Shri Joy Saha that by filling the OA 493 of 2015 on 24th September, 2015, limitation shall stop running for section 7 Application and section 7 Application even filed beyond three years from the date of NPA is entertainable on this ground." Acknowledgement 61. An 'Acknowledgment' means an Admission for the truth of one's liability. The necessary factor that is required is an Admission of the existence of a Debt, liability for contribution in case, a part of it is paid and such an Admission would enlarge the Limitation period, in the considered opinion of this Tribunal. 62. The salient feature of an Acknowledgement are: (a) The acknowledgement of the debt should be writing (b) it should be made by a person against whom the liability is claimed or by person through whom, he derives title or liability (c) the acknowledgment should be made before the lapse of the specified period for a suit, or an application (d) it must indicate the intention to admit the jural relationship of Creditor and Debtor as per decision of the Hon'ble Supreme Court in S.F. Mazda V. Durga Prasad AIR 1961 SC 1236. (e) must contain ad....
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....ty for the purpose of limitation also that the said acknowledgement is binding on the Respondent/ Defendant No. 3. 71. Before the Adjudicating Authority/Tribunal the Respondent/Bank in the Application (filed under Section 7 of the I & B Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority), Rules, 2016 in Part -IV, under the caption particulars of Financial Debt, it is mentioned that the Respondent/Bank/Financial Creditor had granted a term Loan Facility of Rs. 25 Crores to the Corporate Debtor by a sanction Letter dated 12.06.2010, which was Renewed/Restructured/Modified on dates such as 29.09.2012, 24.02.2014, 12.01.2015 and 01.07.2016 by executing the loan documents. Further, the disbursement on different dates, had commenced from 31.07.2010 which is evident from the 'Statement of Account'. 72. The total amount defaulted by the Appellant/Corporate Debtor as on 04.07.2023 is Principal Sum Rs. 24,85,00,000/- and the interest comes to Rs. 40,72,84,195/-, Additional/ penal interest comes to Rs. 9,98,915/- and other charges Rs. 80,28,632/- and the amount comes to Rs. 66,48,11,742/-. The recovered amount being Rs. 23,60,84,594/- and Rs.....
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....oved valuer and the value as consultant, as on 28.11.2018. 77. It comes to be known that the Respondent/Bank/Financial Creditor had issued a sanction letter dated 12.06.2010 in favour of the Corporate Debtor, approving the term facility of Rs. 25 Crores subject to the terms and conditions thereof. As a matter of fact, the Corporate Debtor had executed 'Demand Promissory Notes' dated 02.07.2010, 29.09.2012, 24.02.2014, 12.01.2015 & 01.07.2016. 78. The Corporate Debtor had executed the term loan agreement dated 02.07.2010, 29.09.2012, 24.02.2014 and 12.01.2015. Also the Corporate Debtor had executed the Term Loan Agreement (Hypothecation of Movables) dated 02.07.2010 and 29.09.2012. Moreover, M/s. Air Travel Enterprises India Ltd. had executed a corporate guarantee in favour of the Respondent/Bank/Financial Creditor guaranteeing and simultaneously personal guarantee also was executed with the same terms and conditions applicable with respect to personal guarantee undertaking the Repayment of the entire term Loan Amount and interest in the event of Default. 79. According, to the Respondent/Bank/Financial Creditor, the Corporate Debtor had executed a written confirmation of Deposit ....
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....arious acknowledgement and assurances made by the Principal Borrower, by way of one time settlement offers among other documents and it was solely due to the liberty granted by this Appellate Tribunal that a period of six months was provided to the Principal Borrower, failing which the Respondent/Bank will be at liberty to take appropriate steps and that apart, the limitation period was also excluded. 86. The Learned Counsel for the Respondent/Bank points out that in view of the default committed by the Principal Borrower, a fresh application under Section 7 was filed for the default committed, which came to be admitted by way of an order dated 25.01.2023. 87. The CA (AT) (Ins) 70 of 2023 was filed by the Appellant and the Corporate Debtor/Air Travel Enterprises India Ltd. before this Tribunal and by an order dated 29.03.2023 the 'CIRP' against the 'Principal Borrower' was affirmed by this Tribunal. 88. Later, the Committee of Creditors had filed the IA IBC/462/KOB/2023 in CP IB/46/KOB/2022 through Resolution Professional before the Adjudicating Authority/Tribunal on 24.11.2023 had passed an order of liquidation against the Principal Borrower. The Corporate debtor/ Air Travel En....