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2021 (10) TMI 144 - SC - Insolvency and BankruptcyInitiation of CIRP - burden to prove - time limitation - Corporate Debtor failed to make repayment of its dues - application under Section 7 filed by a power of attorney holder - HELD THAT - The NCLAT was of the opinion that general authorisation given to an officer of the financial creditor by means of a power of attorney would not disentitle such officer to act as the authorised representative of the financial creditor while filing an application under Section 7 of the Code merely because the authorisation was granted through a power of attorney - the corporate debtor cannot take the plea that while the officer has power to sanction the loan such officer has no power to recover the loan amount or to initiate corporate insolvency resolution process in spite of default in repayment. In the present case Mr. Praveen Kumar Gupta has been given general authorisation by the Bank with respect to all the business and affairs of the Bank including commencement of legal proceedings before any court or tribunal with respect to any demand and filing of all necessary applications in this regard. Such authorisation having been granted by way of a power of attorney pursuant to a resolution passed by the Bank s board of directors on 06.12.2008 does not impair Mr. Gupta s authority to file an application under Section 7 of the Code. It is therefore clear that the application has been filed by an authorised person on behalf of the Financial Creditor and the objection of the Appellants on the maintainability of the application on this ground is untenable. Time Limitation - HELD THAT - In the instant case there is no dispute that the date of default is 30.09.2014 and the application under Section 7 of the Code was filed on 25.04.2019. According to the Financial Creditor Section 18 of the Limitation Act is applicable in view of the Corporate Debtor acknowledging its debt by way of letters written in and after 2018 giving details of amount repaid acknowledging the amount outstanding and requesting consideration of one-time settlement proposal. There is no dispute that the date of default in this case is 30.09.2014 as mentioned by the financial creditor in its application under Section 7. A copy of the debit balance confirmation letter dated 07.04.2016 was filed along with the application. As the application was filed only on 25.04.2019 which is beyond a period of three years even after taking into account the debit balance confirmation letter dated 07.04.2016 the application was barred by limitation. However the Corporate Debtor had in its reply before the Adjudicating Authority placed on record a letter dated 17.11.2018 which detailed the amount repaid till 30.09.2018 and acknowledged the amount outstanding as on 30.09.2018. On the basis of this letter and the record showing that the Corporate Debtor had executed various documents amounting to acknowledgement of the debt even in the financial year 2019-20 the NCLT was of the opinion that the application was filed within the period of limitation. The burden of prima facie proving occurrence of the default and that the application filed under Section 7 of the Code is within the period of limitation is entirely on the financial creditor. While the decision to admit an application under Section 7 is typically made on the basis of material furnished by the financial creditor the Adjudicating Authority is not barred from examining the material that is placed on record by the corporate debtor to determine that such application is not beyond the period of limitation. Undoubtedly there is sufficient material in the present case to justify enlargement of the extension period in accordance with Section 18 of the Limitation Act and such material has also been considered by the Adjudicating Authority before admitting the application under Section 7 of the Code. In the present case if the documents constituting acknowledgement of the debt beyond April 2016 had not been brought on record by the Corporate Debtor the application would have been fit for dismissal on the ground of lack of any plea by the Financial Creditor before the Adjudicating Authority with respect to extension of the limitation period and application of Section 18 of the Limitation Act. Appeal dismissed.
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