TMI Blog2021 (2) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Therefore, in all respects, it is seen that the claim of the Financial Creditor is against a time barred debt. In the present case, the Financial Creditor has not placed on record any Revival Letter obtained from the Respondent after 01.06.2012. From the records, it is also to be noted that the Account of the Principal Borrower had been declared as Non Performing Asset (NPA) on 06.06.2012 as evident from the Demand Notice issued to the Principal Borrower which is presently under Liquidation before this Tribunal, the CIRP of which was initiated by this Tribunal based on an Application filed by its Operational Creditor in the matter of M/S. CORTICA MANUFACTURING (INDIA) PRIVATE LIMITED VERSUS M/S. VICTORY ELECTRICALS LIMITED [ 2019 (4) TMI 1938 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI] . The CIRP in relation to the principal borrower was triggered not at the instance of the present Financial Creditor but by an Operational Creditor under Section 9 of the Insolvency Bankruptcy Code, 2016. Even though the liability of the Principal borrower is co-extensive to that of the Guarantor, in an Application filed under Section 7 of IBC, 2016, the Applicant is required to satisfy the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Professional, who has also filed his consent in Form 2. 4. From Part-IV of the Application, it is seen that the Financial Creditor has disbursed a sum of ₹ 134.88 Crores to one M/s. Victory Electricals Limited (hereinafter referred to as Principal Borrower ) comprising of Term Loan and working capital limits. In Part IV of the Application, it is stated that the Default committed by the Principal Borrower under Term Loan Facilities is 31.05.2012 and that of working capital facilities is 09.03.2012. The present Application is filed before this Tribunal on 06.09.2019 against the Respondent who stood as a Corporate Guarantor in order to severe the repayment of financial assistance availed by Principal borrower by executing a Declaration cum indemnity dated 16.11.2009 in favour of the Financial Creditor / Petitioner. 5. From Part - V of the Application, it is seen that the Financial Creditor has placed the following documents in order to prove the Financial debt; Copy of Letter of Arrangement dated 03.09.2005. Copy of Agreement of Loan-Cum-Hypothecation dated 06.09.2005. Copy of Sanction Letter dated 04.11.2006. Copy of Agreement of Loan for Overall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent / Corporate Guarantor. It was further submitted that by the Counsel for the Financial Creditor that from the Financial Statement for the year 2015 of Respondent, it is seen that the Respondent has declared that it has given guarantee to the Financial Creditor for the Financial Assistance availed by the Principal borrower. 8. The Learned Counsel for the Financial Creditor submitted that the Principal Borrower has offered One Time Settlement vide its letter dated 18.05.2016 and the Financial Creditor has also approved the OTS of ₹ 68 Crores vide its letter dated 06.10.2016 and subsequently, the Financial Creditor by its another letter dated 06.10.2016 approved the OTS with a condition to increase the amount to ₹ 69.50 Crores, which was accepted by the Principal Borrower and Corporate Guarantor. 9. It was submitted that the Financial Creditor by their letter dated 03.05.2018 has cancelled the proposed OTS due to the failure on the part of the Principal Borrower to pay the amount as per the agreed terms. Further, it was submitted that the principal borrower and the Respondent / Corporate Guarantor have been admitting their liability towards the Financial Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by this Tribunal, the Financial Creditor does not stand to unjustly enrich or get double dividend by proceeding separately against the Corporate Guarantor. Further, it was submitted that the instant Application satisfies the requirements of the IBC, 2016 and more particularly Section 7(5)(a) of IBC, 2016 and as such the present Application is required to be admitted by this Tribunal. 15. It is seen from the record of proceedings, that this Tribunal vide Order dated 20.02.2020 has directed the Petitioner to file the Written Submissions in relation to the maintainability of this Petition in view of the judgement rendered by the Hon'ble NCLAT in the matter of Dr. Vishnu Kumar Agarwal -vs- Piramal Enterprises Ltd. However, when the matter came up for hearing on 09.12.2020 it was submitted by the Learned Counsel for the Financial Creditor that the interpretation of law as made in the judgement of the Hon'ble NCLAT in the matter of Dr. Vishnu Kumar Agarwal -vs- Piramal Enterprises Ltd was not followed by a concordant bench of the Hon'ble NCLAT in the matter of State Bank of India -Vs- Athena Energy Ventures Private Limited dated 24.11.2020, for detailed reasoning given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is governed by Article 137 of the Limitation Act and is, therefore, three years from the date when right to apply accrues; (e) that the triager for initiation of CIRP by a financial creditor is default on the part of the corporate debtor: that is to say, that the right to apply under the Code accrues on the date when default occurs; (f) that default referred to in the Code is that of actual non-payment by the corporate debtor when a debt has become due and payable; and (g) that if default had occurred over three years prior to the date of filing of the application: the application would be time-barred save and except in those cases where, on facts, the delay in filing may be condoned; and (h) an application under Section 7 of the Code is not for enforcement of mortgage liability and Article 62 of the Limitation Act does not apply to this application. 17. From Part - IV of the Application, it is seen that the Financial Creditor has stated the date of default as 09.03.2012 and 31.05.2012 on the part of the Principal Borrower. However, in order to prove that the present Application falls within the period of limitation the Financial Creditor has stated that the Principal borr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s-Abhyudaya Co-operative Bank Ltd. Anr in Civil Appeal No. 11020 of 2018, has rejected the said contention and held that for filing an Application under Section 7 of IBC, 2016, the time starts ticking when the default occurs. Further, it is to be noted here that Section 18 of the Limitation Act, only extends the period of limitation and it does not shift the date of default. In the present case, the Financial Creditor has not placed on record any Revival Letter obtained from the Respondent after 01.06.2012. From the records, it is also to be noted that the Account of the Principal Borrower had been declared as Non Performing Asset (NPA) on 06.06.2012 as evident from the Demand Notice issued to the Principal Borrower which is presently under Liquidation before this Tribunal, the CIRP of which was initiated by this Tribunal based on an Application filed by its Operational Creditor in the matter of M/s. Cortica Manufacturing (India) Private Limited -Vs- M/S. Victory Electricals Limited in CP/872/1B/2018 dated 10.04.2019. 19. Thus, it is to be noted here that the CIRP in relation to the principal borrower was triggered not at the instance of the present Financial Creditor but by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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