AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1478
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....or condonation could only be filed with the Affidavit of the authorised representative and he was on leave for 10 days and also that the defects were raised by the registry many times and in this background the delay of 65 days has occurred in refiling the appeals. The appeals however were filed within the stipulated limitation. 2. We find that the proceedings of these appeals are initiated ex-parte against the respondents. Keeping in view the explanation given in the applications we find the explanation provided by the appellant is sufficient. 3. In result both the aforesaid applications are allowed and the delay of 65 days caused in refiling the aforesaid appeals is hereby condoned. CA (AT) (Ins) No. 2157 of 2024 and CA (AT) (Ins) No. 2158 of 2024 Aforesaid appeals are having a common issue and for the sake of convenience are being disposed of by passing this common order. 2. CA (AT) (Ins) No. 2157 of 2024 has been presented under Section 61 of the IBC, 2016 against the order passed by Ld. Adjudicating Authority dated 16.07.2024, with regard to an application filed by the appellant under Section 7 of the Code in CP (IB)/46 (KB) 2023 whereby the application moved by....
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....IRP vide order dated 20.12.2023, passed by the adjudicating authority under Section 7 of the Code. 10. It is further submitted that it is also not in dispute that the Principal Borrower was declared NPA on 28.08.2014, and on 11.08.2017 the Principal Borrower executed a letter of revival and acknowledge its debt towards the consortium lenders and made several payments from time to time thereafter after the revival arrangement. 11. It is further submitted that the appellant had proceeded against the Principal Borrower and the Corporate Guarantors by issuing a demand notice under Section 13(2) of the SARFAESI Act, 2002 on 07.04.2018 for an outstanding dues amounting to Rs. 1,054,500,000/- as on 07.04.2018 however both the principal borrower and corporate debtor failed to pay and as such they were jointly and severally liable to pay the outstanding dues. 12. It is further submitted that even after default on the part of principal borrower the financial creditor received several payments from the principal borrower from 2014 to 2018 and the last payment by the principal borrower was made on 23.08.2018 for an amount of Rs. 2,49,157/- and further the principal borrower has acknow....
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....e Ld. Tribunal on the issue of limitation however, the two other applications of the appellant bearing CP (IB) No. 43 (KB) /2023 and CP (IB) No. 45 (KB)/2023 which were also moved against the two other corporate guarantors under Section 7 of the Code have been admitted against the guarantors vide order dated 19.12.2024 and 02.09.2025 and the insolvency process has been started against the other two corporate guarantors of the CD. 18. It is further submitted that Ld. tribunal has not considered that the Hon'ble Supreme Court of India in the matter of Suo Motu W.P (C) NO. 3 OF 2020 with M.A No. 21 of 2022; M.A No. 665 of 2021; M.A No. 29 of 2022 has directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings and thus committed a patent illegality. 19. We have heard Ld. counsel for the parties and It is recall that despite the sufficient service of the notice on the Respondents they did not appear before this Appellate Tribunal and vide order dated 17.10.2025 the proceedings of this appeal were initiated ex-parte aga....
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....o 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 a decree or order shall not be deemed to be an application in respect of any property or right." 23. We notice that the principal borrower in its balance sheet for the year ending 2020-2021 and 2021-2022 has acknowledged his liability and the debt towards the appellant (financial creditor). There is no quarrel with the proposition that the acknowledgement made by the principal borrower will tantamount to be an acknowledgment made by the guarantor and any acknowledgement made in writing within the limitation period already existing would further extend the period of limitation under Section 18 of Indian Limitation Act, 1963. 24. In this regard the law laid down by the Hon'ble Supreme C....
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....o different transactions and the Guarantor's liability has to be read from the Deed of Guarantee." (Emphasis Added) 26. In Asset Reconstruction Co. (India) Ltd. vs. Bishal Jaiswal, (2021) 6 SCC 366, observed that: "40. In CIT v. Shri Vardhman Overseas Ltd. [CIT v. Shri Vardhman Overseas Ltd., 2011 SCC OnLine Del 5599: (2012) 343 ITR 408], the Delhi High Court held: (SCC OnLine Del para 17) "17. In the case before us, as rightly pointed out by the Tribunal, the assessee has not transferred the said amount from the creditors' account to its profit and loss account. The liability was shown in the balance sheet as on 31-3-2002. The assessee being a limited company, this amounted to acknowledging the debts in favour of the creditors. Section 18 of the Limitation Act, 1963 provides for effect of acknowledgment in writing. It says where before the expiration of the prescribed period for a suit 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 party against whom such property or right is claimed, a fresh period of limitation shall commence from the time when the ack....
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....shown in a balance sheet of a company amounts to an acknowledgment for the purpose of Section 19 of the Limitation Act and in order to be so, the balance sheet in which such acknowledgment is made need not be addressed to the creditors. In light of these authorities, it must be held that in the present case, the disclosure by the assessee company in its balance sheet as on 31-3-2002 of the accounts of the sundry creditors' amounts to an acknowledgment of the debts in their favour for the purposes of Section 18 of the Limitation Act. The assessee's liability to the creditors, thus, subsisted and did not cease nor was it remitted by the creditors. The liability was enforceable in a court of law." xxx xxx xxx 44. In Zest Systems (P) Ltd. v. Center for Vocational & Entrepreneurship Studies [Zest Systems (P) Ltd. v. Center for Vocational & Entrepreneurship Studies, 2018 SCC OnLine Del 12116], the Delhi High Court held: (SCC Online Del paras 5-6) "5. In Shahi Exports (P) Ltd. v. CMD Buildtech (P) Ltd. [Shahi Exports (P) Ltd. v. CMD Buildtech (P) Ltd., 2013 SCC OnLine Del 2535: (2013) 202 DLT 735] this Court held as follows: 7. It is hardly necessary ....
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....urana v. Union Bank of India (2021) ibclaw.in 53 SC, decided on 26.03.2021) have applied the provisions of Section 14 and Section 18 of the Limitation Act to the IBC and that an entry made in the books of accounts, including the balance sheet, can amount to an acknowledgement of liability within the meaning of Section 18 of the Limitation Act. 28. The aforesaid legal citations are sufficient to conclude that any acknowledgment made by the principal borrower would be deemed to be an acknowledgment by the corporate guarantor also. Since, it appears to be an admitted situation that up to the financial year 2019-2020, 2020-2021, 2021-2022 the debt was shown by the principal borrower in his financial statements and the acknowledgment made by the principal borrower is as good as the acknowledgment made by the guarantor, therefore, by virtue of Section 18 of Indian Limitation Act, 1963 the limitation to file an application under Section 7 of the IBC was available to the appellant till 2024 while the applications aforesaid under Section 7 of the Code have been filed in the year 2023. Therefore, in our considered opinion a patent illegality has been committed by the ld. Tribunal in rejec....