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2022 (4) TMI 882 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - barred by time limitation or not - HELD THAT:- Admittedly the date of default is 30.06.2014 and the letter informing the Corporate Debtor about the accounts having become NPA is 13.11.2014. In the instant case it is not disputed by the Appellant that First OTS letter offered by the Corporate Debtor was dated 06.06.2018 though it is the case of the Respondent that the OTS proposal is 01.08.2018. Be that as it may the First OTS proposal is beyond the period of three years and, therefore, it does not aid the case of the Appellant that this OTS is an acknowledgement of debt as provided for under Section 18 of the Limitation Act, 1963 as it is long after the expiry of the ‘prescribed period’ of three years of limitation - While the OTS Proposals establish an existence of jural relationship between the Bank and the Corporate Debtor, the facts remains that First letter of the OTS proposal was made in June, 2018, whereas the “prescribed period” of three years have already lapsed in June, 2017. The Balance Sheet for the Year ending 31.03.2017 which is within three years from the date of NPA i.e. 13.09.2014 shows that there is an amount of ₹ 366953917.45 depicted under secured term loan vis a vis a sanction limit of ₹ 3383 lakhs. The amount in default is shown to be ₹ 3692 lakhs. Expression of ‘default’ has been defined in Section 3(12) of the Code meaning non-payment of ‘Debt’ when a whole or part or any part or instalment of the amount of debit has become due and payable and is not paid by the Debtor or the Corporate Debtor, as the case may be. Section 18 of the Limitation Act, 1963 comes into play every time when the principal borrower/Corporate Debtor, as the case may be, acknowledged their liability to pay the debt, however, such acknowledgement must be before the expiration of the prescribed period of limitation, which in the instant case is within three years period. This Tribunal is of the considered view that the Appellant having exercised their legal right to file an IA before this Tribunal to bring on record the Balance Sheet for the financial year ending 2016-17, instead of filing the same before the Adjudicating Authority, it cannot be said to be nonest specially in the light of the fact that the question of limitation per se has been argued/pleaded by the Appellant herein before the Adjudicating Authority in terms of acknowledgement of ‘debt’ under Section 18 of the Limitation Act, 1963 vide OTS proposals. This Tribunal holds that ‘Debt’ has been duly acknowledged in the Balance Sheet for the Year 2016-17 which is also duly prepared and authenticated by the Auditors Report amounting to ‘Admission of Liability’ and, therefore, satisfies the requirements of liability for a valid acknowledgement under Section 18 of the Limitation Act, 1963. The matter is remitted back to the Adjudicating Authority to decide the admission of the Application in accordance with Law as expeditious as possible - Appeal allowed.
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