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2021 (4) TMI 678 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHIInitiation of CIRP - Time limitation - acknowledgments of debts under Section 18 of the Limitation Act, 1963 or not - NPA - HELD THAT:- While the Writ Petition was pending Financial Creditor issued notice dated 24th December, 2014, that authorized officer had taken possession of the secured assets. On 11th May, 2017, District Magistrate Hooghli issued order under SARFAESI Act, 2002 for possession by the Financial Creditor of the assets hypothecated. On 24th July, 2017, High Court passed interim orders restraining Financial Creditor from taking further steps under SARFAESI Act, 2002, until further orders. Financial Creditor on 10th July, 2018 filed Application under Section 7 of IBC. Corporate Debtor opposed the Application but ground of limitation was not there. Adjudicating Authority admitted the said application on 25th April, 2019. In Appeal to NCLAT issue of limitation was raised but the Appeal was dismissed - it is clear that Section 18 of the Limitation Act applies. Balance-Sheets-Acknowledgment? - HELD THAT:- There are various Judgements passed by various Hon’ble High Courts including High Court of Delhi and even Hon’ble Supreme Court of India which have dealt with the Balance Sheet/Annual Returns of Companies and entries in books of Account where entries in the same have been treated as “acknowledgement of debt” and even accepted the same for the purpose of Section 18 of the Limitation Act, 1963. It is well settled position of law that Annual Returns/Audited Balance Sheets can be referred to and relied on to see if contents therein amount to acknowledgement or not - it is settled law appearing from the Judgements of the High Court of Delhi and other High Courts that Balance Sheets can be looked into to see if there is acknowledgement of debt. Perusing Judgements of Hon’ble Supreme Court we find that even Hon’ble Supreme Court has looked into Balance Sheets and Books of Account to see if there is Acknowledgement of Liability. If the amount borrowed is shown in the Balance Sheet, it may amount to Acknowledgement. The Judgements of Hon’ble Supreme Court of India are binding and Balance Sheets cannot be outright ignored. The Annual Returns/Audited Balance Sheets, one-time settlement proposals, proposals to restructure loans, by whatever names called, cannot be simply ignored as debarred from consideration and in every given matter, it would be a question of applying the facts to the law and vice versa, to see whether or not the specific contents, spell out an acknowledgement under the Limitation Act. Thus, if the NPA is counted even from 30.09.2012, the balance- sheets which were before the Adjudicating Authority for year ending 2015 to 2016 show acknowledgment of debt and the Application under Section 7 filed on 3rd October, 2018 cannot be said to be time-barred. The balance-sheet for financial year ending 2015 was signed at 30.05.2015 and balance- sheet for financial year ending 31st March, 2016 was signed on 30.05.2016. Thus the Application under Section 7 was within limitation - OTS was declined. Even keeping this document in mind, if one was to keep in view the balance- sheet for year ending 31st March, 2015 and consider this OTS proposal and perused the date of filing of Application under Section 7 of IBC, still the claim must be held within limitation. The main thrust of the argument of Learned Counsel for the Appellant has been that in the matter of “Swiss Ribbons” [2019 (1) TMI 1508 - SUPREME COURT] Hon’ble Supreme Court has referred to the shift in the legislative policy and thus see date of default, simply calculate three years and hold the Application as time-barred unless there is Application under Section 5 of Limitation Act. The legislative policy moved from the concept of “inability to pay debts” to “determination of default” and one of the policy reasons for this was that “cause of default” is not relevant. We are unable to appreciate the submission made by the Learned Counsel for the Appellant that because of shift in legislative policy from “inability to pay debts” to “determination of default”, it makes any difference to the applicability or inapplicability of provisions of Limitation Act, as far as may be. Appeal dismissed.
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