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2021 (12) TMI 528 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - time limitation - Whether the relevant column in Section 7 Application having not been amended by Respondent No.1, other materials can be looked into for the purposes of finding an acknowledgement within the meaning of Section 18 of the Limitation Act? - HELD THAT:- The filing of an Application under Section 7 in Form-1 is procedural requirement. The requirement in procedural rule has not to read in a manner, which may preclude an affected party from bringing other materials on record to bring home his point. The procedure prescribed in the Rules are with an intent to capsule the relevant information in prescribed column. But that is not to shut out any other relevant information, if brought subsequently. The Hon’ble Supreme Court in DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [2021 (8) TMI 315 - SUPREME COURT] has laid down that IBC Rules and Regulations have to be construed liberally, in a purposive manner to further the objects of enactment. Without amending the relevant column in Section 7 Application, a Financial Creditor can bring relevant materials on record before the Adjudicating Authority by way of supplementary affidavit, rejoinder affidavit and the additional affidavit, which materials can be looked into and non-amending of relevant column in Form-1 shall not preclude the admissibility of the materials brought subsequently by way of supplementary affidavit or additional affidavit. Whether the balance sheet as on 31st March, 2017, which was filed along with supplementary affidavit before the NCLT, can only be looked into and balance sheets for the year 2015 and 2016 cannot be looked into? - HELD THAT:- The balance sheets as on 31st March, 2015 and 31st March, 2016, which have been filed along with the reply affidavit of Respondent No.1 before this Appellate Tribunal, can be looked into along with the balance sheet as on 31st March, 2017, which was already on record before the Adjudicating Authority. Whether balance sheets for the years 2015, 2016, 2017 contain an unequivocal acknowledgement of debt by the Corporate Debtor, which is a sufficient acknowledgement within the meaning of Section 18 of the Limitation Act? - HELD THAT:- Upon a reasonable construction of the language used by the debtor in writing the relation of debtor and creditor must appear to be distinctly admitted, that it must be admitted also to be a subsisting jural relation, and then an intention to continue it until it is lawfully determined must also be evident. The Application filed by Financial Creditor under Section 7 of the IBC mentions in detail of the Rupee Term Loans taken from the Bank and Financial Institutions. The details as mentioned in the financial statement clearly indicate that Rupee Term Loans were taken with regard to power project of units of 270 MW each aggregating to 540 MW and for security of which loan mortgage, charge of immovable properties of the Company for present and future as well as hypothecation of all movable properties of the Company including movable plant and machinery, spares, tools and accessories was made. Balance sheets as on 31st March, 2015, 31st March, 2016 and 31st March, 2017 contain the acknowledgement within the meaning of the Section 18 of the Limitation Act and Respondent No.1 is entitled to claim that fresh period of limitation started after the acknowledgement. The date of default being 31st July, 2013 and balance sheet as on 31st March, 2015 having signed on 2nd September, 2015, the acknowledgement was made within expiry of three years’ period of limitation from 31st July, 2013. The acknowledgement continues in balance sheets as on 31st March, 2016 and 31st March, 2017. Hence, the Application under Section 7 of the IBC filed in 26th December 2018 is well within limitation and has rightly been admitted by the Adjudicating Authority.
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