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2020 (8) TMI 697 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - applicability of time limitation - HELD THAT:- Section 18 of the Limitation Act, provides that where before the expiration of the prescribed period of limitation for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing then fresh periods of limitation shall be computed from the time when acknowledgement was so signed. In the case of J.C. BUDHRAJA VERSUS CHAIRMAN, ORISSA MINING CORPORATIONLTD. & ANR. [2008 (1) TMI 963 - SUPREME COURT], Hon’ble Supreme Court has specified that explanation to Section 18 provides that an acknowledgement may be sufficient though it omits to specify the exact nature of the right are avers that the time for payment has not yet come or is accompanied by a refusal to pay, or is coupled with a claim to set off or address to a person other than a person entitled to the right - Hon’ble Supreme Court has relied on its earlier judgment passed in KHAN BAHADUR SHAPOOR FREDOOM MAZDA VERSUS DURGA PROSAD CHAMARIA AND ORS. [1961 (3) TMI 113 - SUPREME COURT]. In the said case, Hon’ble Supreme Court has clarified that acknowledgement as prescribed by Section 19 merely renews debt; it does not create any new right. It is a mere acknowledgement of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or either by implication. The statement of which the plea of acknowledgement is based must relate to the present subsisting liability, though the exact nature of the specific character of the said liability may not be indicated in words. Thus in the case mentioned above, the Hon’ble Supreme Court has held that the limitation can only be extended in the manner provided U/S 18 of the Limitation Act. For example, an acknowledgement of liability under Section 18 of the Limitation Act would certainly extend the limitation period - In this case, admittedly the account of the Corporate Debtor was classified of NPA on 29th January 2013. Therefore, as per the law laid down by the Supreme Court case of GAURAV HARGOVINDBHAI DAVE VERSUS ASSET RECONSTRUCTION COMPANY (INDIA) LTD. AND ANR. [2019 (9) TMI 1019 - SUPREME COURT], the date of default shall be computed from the date when the account was classified as NPA, i.e.29th January 2013. Article 137 of the Limitation Act shall be applicable for an Application filed under Sections 7, 9 or 10 of the I&B Code. Since the account of the Corporate Debtor was classified as NPA on 29th January 2013. Therefore, default started on 29th January 2013 and three years period of limitation was available for applying u/s Section 7 of the Code - thus, a fresh period of limitation of three years started w.e.f. 01st June 2016 in terms of Section 18 of the Limitation Act. Thus it is clear that the petition filed under Section 7 of the Code on 29th September 2018 is well within limitation. The impugned order is assailed only on the Limitation ground therefore Appeal deserves to be rejected. Impugned Order upheld - appeal dismissed.
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