TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 889
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....file two separate petitions under Sec. 7 IBC for each of the two loans it had advanced. 1.2 Before the Adjudicating Authority, the CD neither denied nor disputed either the debt or default, but defended the action on the ground that the debts were time barred. This defence was negatived by the Adjudicating Authority. Facts: 2.1 Except for the two separate loans advanced to the CD, rest of the facts, more particularly that which are relevant in the context of the line of defence adopted by the appellant before the Adjudicating Authority, are identical. 2.2 Two loans were advanced by M/s Diwan Housing Finance Corporation Ltd (DHFL) to the CD, and the details are: a) On 10.09.2014, a loan of Rs.12.0 crores was sanctioned as against which Rs.11.50 crores was advanced on various dates to the CD. (Ref: C.A.293 of 2025). This loan was to be repaid in 24 EMI and the first instalment was to commence on the expiry of 24 months from the date of disbursements. b) On 25.09.2014, the second loan of Rs. 11.0 crores was sanctioned out of which Rs.9.50 crores was disbursed. This loan was to be repaid in 36 EMI and as in the earlier loan, the first instalment fell due f....
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.... to C.A.294 of 2025 and C.A.293 of 2025) under Sec.7 IBC. In part IV of the petition, the respondent had given the date of default as 06.12.2016 and also had referred to 29.07.2024, the date on which the first CIRP proceedings against the CD was set aside. 3. As outlined earlier, the appellant's only line of defence was limitation. Since the same formed the arguments in this appeal, they are not detailed. Suffice to state, the Adjudicating Authority has found the appellant's defence untenable and admitted both the petitions to CIRP process vide separate Orders. These orders are now under challenge in these appeals. Arguments 4. Before adverting to the rival arguments few dates are contextually pertinent are collated as below: a) In Part IV of the petitions to initiate both the CIRP, 16.11.2016 is stated to be the date of default. b) Between 03.12.2019 and 07.06.2021 there was moratorium vis-à-vis the creditor DHFL. c) From 23.12.2021 till 29.07.2024, CD was under first CIRP, and it was under moratorium during this period. d) In between, from 15.03.2020 to 28.02.2022 limitation was in eclipse thanks to the order of the Hon'ble Supr....
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....lt which is essential to be reckoned for computing limitation 07.02.2017. Reliance was to the ratio of this tribunal in Shantanu Jagdish Prakash Vs SBI [2025 SCC OnLine NCLAT117] and Mavjibhai Nagarbhai Patel Vs SBI [2024 SCC OnLine NCLAT 2014]. This apart, limitation being a legal question it can be considered at any stage by the courts or tribunal. Reliance was placed on the ratio in R. Kandasamy Vs T.R.K.Sarawathy [(2025) 3 SCC 513], S. Shivraj Reddy Vs S. Raghuraj Reddy [2024 SCC OnLine SC 963] and National Textile Corporation Ltd., Vs Nareshku [(2011)12 SCC 695] b) Secondly as per Sec. 60(6) of the IBC, for computing the period of limitation for suit or application by or against the corporate debtor, the period during which the CD was under moratorium should be excluded. Here, there was moratorium both against DHFL, the original creditor of the CD and also the CD itself. These periods have to be eventually added. Reliance was placed on the ratio of the Hon'ble Supreme Court in New Delhi Municipal Council Vs Minosha India Pvt., Ltd., [(2022)8 SCC 384]. c) Thirdly, on 17.03.2022, Piramal, the SRA of DHFL preferred its claim to the resolution profession appointe....
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....tation, it necessarily ends on 23.11.2019. But RP had admitted the claim of the creditor long after the expiry of the limitation period. Discussion & Decision 8. The arguments have been carefully assessed for their respective merits. Before adverting to the specifics of the arguments, it is necessary to set right few aspects: a) Contrary to the contention of the respondent, limitation is not a pure question of law, but is a mixed question of law and fact. This has long been settled. b) The second aspect relates to Sec. 238A of the Act. It provides that the provisions of the Limitation Act would apply, as for as may be, to the proceedings or appeals before the Adjudicating Authority, the NCLAT, the DRT or DRAT as the case may be. Here Sec. 3(1) of the Limitation Act becomes most relevant. It reads: Sec.3 Bar of limitation: Subject to the provisions contained in Sec. 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence." c) Therefore, issue of limitation can neither be depended on any concession of partie....
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.... particular case. To explain, if the IBC has not prescribed any Form of pleadings, or if it had suggested that it may assume the form of a plaint, then the factum of default in repaying the debt would have to be indicated as one of the facts constituting a cause of action and so is the date as to when this fact has happened. Merely because the IBC has prescribed a Form of pleading, that does not ipso facto imply that the date of default in paying the debt and the date of commencement of limitation for commencing a CIRP or PIRP should not be different. And, this distinction should neither be lost sight of, nor should they be confused." The date of default (in repaying the debt) in Part IV of the Statutory Form of pleading is part of the cause of action and not part of the remedy. To explain, every action requires a cause for instituting it, and any action founded on such a cause must be within the period of limitation. This tribunal, therefore, holds that while the date of default in payment of the debt as mentioned in Part IV of the petition under Sec. 7 IBC deserves to be factored in for the purpose of computation of limitation in instituting the petition, yet it is not a....
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....in the IRP and that even the officers of the CD would have to report to the IRP and the financial institutions are required to act on his instructions. Sec. 17(2)(a) authorises an IRP to "act and execute in the name and on behalf of the corporate debtor all deeds, receipts, and other documents, if any." Sec. 18 expands and also explains the scope of an IRP's authority. Indeed, Sec. 18(1)(b) authorises him to "receive and collate all the claims submitted by creditors to him..." Sec. 20 of the IBC vests the IRP with the authority to make every endeavour to ensure that the CD is kept alive as a going concern. And, when an IRP is replaced by a RP post the constitution of the CoC, Sec. 25 read with Sec. 28 the IBC informs that RP would continue to discharge substantially the functions which the IRP has been hitherto performing, and more. In particular Sec. 25(2)(e) mandates that a resolution professional "shall update the list of claims.". Thus, when the IRP at the initial stage of the CIRP proceeding and the RP at a later stage is required to perform the functions of the Board of Directors and also have been authorised to admit Claims from the creditors of the CD, to dispute the author....
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.... legal implication is that the secured creditors will cease to have control over the security-assets but without losing their character as secured creditors. It now follows that, when a CIRP is terminated or the admission of the CD to CIRP is later negatived, the right of the secured creditors to exercise their right in relation to the security-assets gets restored to them. 15.1 Turning to a Claim, it per se cannot be equated to initiating a CIRP proceeding, something which the counsel for the appellant himself argued. Sec. 3(6) of the IBC defines a Claim to broadly mean (a) either a right to payment, or (b) a right to remedy for breach of contract, and in either case a claim need not be based on a decree of the court. Accordingly, when a creditor makes a Claim it is founded on his or its right to payment, or more precisely right to repayment. 15.2 It now logically follows that where a default in repayment of a secured debt has continued for a period beyond three years, a secured financial creditor, even if it may not be able to institute a petition under Sec. 7 IBC, can still make a Claim to the IRP or the RP in a pending CIRP, if the Claim itself is not barred by limitation....
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.... 16.11.2016 or 23.11.2016, the SRA of the creditor has still made its Claim before the IRP or the RP in the first CIRP against the CD within 12 years, when the right to enforce the right to recover secured debt is still alive and not barred by limitation. 16.1 Does admission of a Claim by the RP in an earlier CIRP would amount to an acknowledgement of the debt? A financial creditor is required to prefer its Claim in terms of Regulation 8 of the CIRP Regulations, 2016, and in cases of a financial debt in terms of Regulation 12(3) the IRP or the RP, as the case may be, may not have an option but to admit the Claim. And, when the Claim is admitted, it only implies that the CD through the offices of IRP or the RP has admitted the pre-existing liability of the CD to pay the creditor who has an enforceable right to payment. 16.2 It is here, Regulation 12(3) which mandates that claims of all financial debt shall be admitted without a scrutiny may require a qualification, for ex facie it seems to suggest that even a Claim of a time barred secured financial debt can be admitted. It is one thing to say that a claim of a financial creditor shall be admitted without proof of entitlement ....
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....ier CIRP proceeding against the CD, when the claim of the respondent was admitted, it has already become time barred. Indeed, the facts as have been presented does not even provide any opportunity to the appellant to take any such defence. 19. There is therefore, little difficulty in holding that the date of admission of a Claim by the IRP grants a fresh date for commencement of limitation and when the Claims are subsequently updated it pushes the date of terminus a quo to that date. 20. Here at least two judgements of the Hon'ble Supreme Court are required to be considered. In Dena Bank case [(2021)10 SCC 330], the question before the Court was whether limitation must be reckoned from the date of initial default or whether subsequent dates on which the CD has acknowledged the liability in its balance sheet and account books can be considered. The Court held it in the affirmative, and in so doing it has observed: "140.......an application under Section 7 IBC would not be barred by limitation, on the ground that it had been filed byond a period of three years from the date of declaration of the loan account of the corporate debtor as NPA, if there were an acknowledgem....