TaxTMI 
TaxTMI 
2024 (9) TMI 412
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....ication is challenged by the Personal Guarantor in this Appeal. 2. Brief facts necessary to be noticed for deciding the Appeal are: i. STCI Finance Ltd. sanctioned a corporate short-term loan of Rs.10 Crores to Man Tubinox Ltd. (Borrower No. 1) and Man Infraprojects Ltd. (Borrower No. 2). ii. The Loan Agreement was executed on 01.12.2015 by the Financial Creditor and Borrower No. 1 and Borrower No. 2. iii. A Deed of Guarantee dated 01.12.2015 was executed by the Appellant in favour of the STCI Finance Ltd. guaranteeing the repayment of the loan. iv. On 17.01.2017, a Notice was issued by the Financial Creditor to the Borrower No. 1 and 2 as well as Guarantors including Appellant demanding the payment of Rs.8,52,72,832/- as on 08.01.2017, together with the interest till payment. v. Another Notice dated 01.06.2017 was issued by Financial Creditor under Section 13(2) of SARFAESI Act, 2002, calling upon the Borrower No. 1 and 2 to make the payment of Rs.7,38,80,553/-. Notice was also endorsed to Personal Guarantors including the Appellant demanding the said amount within seven days of receipt of Notice. vi. The Appellant replied t....
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....e Application filed on 30.09.2021 was well within time since the period of three years from acknowledgement was to come to an end on 11.06.2020 and in view of the Order of Hon'ble Supreme Court in `Re: Cognizance for Extension Of Limitation' in Suo Motu Writ Petition (Civil) No. 03/2020 period from 15.03.2020 till 25.03.2021 has to be excluded. 6. We have heard Counsel for the Parties and perused the record. 7. The only question which needs to be considered in the present case is as to whether Letter dated 12.06.2017 which was written by the Appellant to the Financial Creditor had effect of extending the Limitation for a period of three years from 12.06.2017 or the Letter cannot be treated an acknowledgement within meaning of Section 18 of the Limitation Act. Section 18 of the Limitation Act contains heading effect of acknowledgement in writing. Section 18 of the Limitation Act provides as follows: "18. Effect of acknowledgment in writing.-(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the par....
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....uarantor) also triggers when the principal borrower acknowledges its liability in writing within the expiration of prescribed period of limitation, to pay such outstanding dues and fails to pay the acknowledged debt. Correspondingly, right to initiate action within three years from such acknowledgment of debt accrues to the financial creditor. That however, needs to be exercised within three years when the right to sue/apply accrues, as per Article 137 of the Limitation Act. This is the effect of Section 18 of the Limitation Act. In that, a fresh period of limitation is required to be computed from the time when the acknowledgment was so signed by the principal borrower or the corporate guarantor (corporate debtor), as the case may be, provided the acknowledgment is before expiration of the prescribed period of limitation. Thus, the conclusion reached [Union Bank of India v. Surana Metals Ltd., 2019 SCC OnLine NCLT 9859] by NCLT and affirmed [Laxmi Pat Surana v. Union Bank of India, 2020 SCC OnLine NCLAT 217] by Nclat on the basis of the asservation in the application under Section 7 IBC, read with the relevant undisputed correspondence, is a possible view." 9. The Hon'ble Supre....
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....here must upon the fair construction of the letter, read in the light of the surrounding circumstances, be an admission that the writer owes the debt". As already stated, the person making the acknowledgment can be both the debtor himself as also a person duly authorised by him to make the admission..." 10. Now we come to the Letter which is sheet anchor of the submission of the Appellant. Letter dated 12.06.2017, which is filed as Annexure A-14 is as follows : "June 12, 2017 To Ms. Archana Bhide STCI Finance Limited A/B1 802, 8th Floor, A-Wing, Mararhon Innova Marathon Nextgen Compound Off. Ganpatrao Kadam Marg Lower Parel (West), Mumbai 400013 Dear Madam, Ref: Notice U/s 13(2) of SARFAESI Act dated June 1, 2017 With reference to your above notice, I wish to inform you that the borrower companies i.e. Man Tubinox Limited (Borrower 1) and man Infraprojects Limited (Borrower 2) are in advance stage of discussion with a number of lenders and expect to close your loan shortly. You are therefore requested to grant time till July 31, 2017 and withhold any further actions under the said ....
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....f the default committed by the principal debtor, you as the guarantor became liable jointly and severally for the said debt. 4. For the reasons stated above, Financial Institution invokes your guarantee and hereby call upon you to discharge in full your liabilities by paying to the Financial Institution of Rs. 7,33,80,553/ (Rs. Seven Crore Thirty Three Lakh Eighty Thousand Five Hundred and Fifty Three only) (contractual dues upto the date of notice) with interest @ 13.75 % p.a with monthly rests plus penal interest @2% together with further interest thereon @13.75% p.a with monthly rests and additional/penal interest @2% from 01st June,2017 till payment/realisation within 7 days of receipt of the notice." 12. By Notice dated 01.06.2017 which was under Section 13(2), the Personal Guarantors were also called upon to discharge their liabilities by paying the financial institutions amount of Rs.7,33,80,553/- thus when letter dated 12.06.2017 was written, it was in reference to the said Notice which is clearly mentioned in the Letter. The Letter thus clearly was in response to the Notice which Letter further mentioned that borrowers are at advance stage of discussion and the....