Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + SC Insolvency and Bankruptcy - 2022 (7) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (7) TMI 1037 - SUPREME COURTInitiation of CIRP - NCLT rejected the application - NPA - Period of limitation - NCLT that, a statement contained in the balance sheet cannot be treated as an acknowledgement of liability under Section 18 of the Limitation Act - Proposal of OTS is older than 3 months - HELD THAT:- The decisions in Sesh Nath Singh [2021 (3) TMI 1183 - SUPREME COURT], Laxmi Pat Surana [2021 (3) TMI 1179 - SUPREME COURT] and Asset Reconstruction Company [2021 (4) TMI 753 - SUPREME COURT] have subsequently been followed in numerous decisions of this Court delivered by two-Judge Benches, namely: Dena Bank v C. Shivakumar Reddy [2021 (8) TMI 315 - SUPREME COURT], STATE BANK OF INDIA VERSUS VIBHA AGRO TECH LIMITED [2021 (10) TMI 1348 - SUPREME COURT], Devas Multimedia Private Ltd. v Antrix Corporation Ltd. and Another [2022 (1) TMI 774 - SUPREME COURT] and SVG Fashions Pvt. Ltd. (Earlier Known As SVG Fashions Ltd.) v Ritu Murli Manohar Goyal and Another [2022 (4) TMI 16 - SUPREME COURT] - In all these decisions the principles emerged that An acknowledgement in a balance sheet without a qualification can be relied upon for the purpose of the proceedings under the IBC. In view of the above decisions, the position of law has been set at rest. Neither the NCLT nor the NCLAT had the benefit of adjudicating upon the factual controversy in the context of the decisions of this Court. The principles which emerge are that: (i) The provisions of Section 18 of the Limitation Act are not alien to and are applicable to proceedings under the IBC; and (ii) An acknowledgement in a balance sheet without a qualification can furnish a legitimate basis for determining as to whether the period of limitation would stand extended, so long as the acknowledgement was within a period of three years from the original date of default. It is also noted that Mr Niranjan Reddy has relied upon documentary material to indicate that the acknowledgements of liability were within a period of three years from the date of default and, hence, the applicant filed by the appellant under Section 7 of the IBC was within limitation. Reliance has also been placed on the letter of revival dated 26 April 2015 and the offer of OTS on 6 November 2015. Since we are inclined to restore the proceedings back to the NCLT for fresh adjudication in view of the decisions of this Court noted above, we are not entering upon the factual dispute on whether the application filed under Section 7 of the IBC would result in an initiation of the CIRP in the present case. The appropriate course of action would be to keep open all rights and contentions of the parties on merits to be adjudicated upon before the NCLT. The proceedings shall stand restored to the file of the NCLT for adjudication afresh, keeping all rights and contentions of the parties open on the factual aspects of the controversy.
|