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2020 (5) TMI 539 - AT - Insolvency and BankruptcyTime Limitation - CIRP process - attachment of property and possession taken over - appellant contended that the Application under Section 7 is barred by limitation, the date of default being 15.10.2013; there is no “Acknowledgment Of Debt” to take benefit under Section 18 of the Limitation Act 1963; the letter dated 20.03.2018 offering OTS is beyond the limitation period of three years - HELD THAT:- The issue of limitation is to be addressed to, keeping in view the ratio laid down by the Hon’ble Supreme Court in B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT] where the Hon’ble Supreme Court has laid down that Limitation Act is applicable to Applications filed under Section 7 and 9 of the Code from the inception of the Code and that Article 137 of the Limitation Act, getsattracted. The “right to sue” therefore accrues when a default occurs. If the default has occurred over 3years prior to the date of filing of the Application, the Application would be barred under Article 137 of the Limitation Act, 1973. In the instant case, the date of default as mentioned in part IV of the Application is 15.10.2013. It is the Respondent’s case that the date of default is to be taken as 30.06.2014 as observed by the Adjudicating Authority - We observe from the letter dated 02.07.2014, that the date of default is 30.06.2014 though the date of default mentioned in Part IV of the Application, is 15.10.2013. In this case the ‘right to sue’ accrues on 30.06.2014 and 3 years limitation period ends on 29.06.2017, whereas the Application was filed on 08.11.2017 - the contention of the Learned Counsel that the Financial Creditor has also initiated proceedings under DRT and under the SARFAESI Act 2002, and therefore this period should be excluded, cannot be sustained. Applicability of benefit under Section 14 (2) - HELD THAT:- In the instant case benefit under Section 14 (2) cannot be given to the Applicant as there is no material on record to show that the subject Application was being prosecuted with due diligence in a court of First Instance or of Appeal or Revision which has no jurisdiction - In a catena of judgments it has been observed that proceedings under IBC cannot be construed to be that of a recovery or a Money Suit. In the present case there is no evidence brought on record to establish that the provisions of Sec 18 have been complied with. A perusal of Annexure 5 relied upon by the counsel for the first respondent is neither signed by the concerned party against whom the right is claimed nor by any person through whom he derives his title or liability. Viewed from any angle, this statement does not construe ‘Acknowledgement Of Debt’ as mandated under Sec 18. While addressing this issue, the Adjudicating Authority has failed to consider that ‘the Acknowledgment’ relied upon by the Applicant and observed so in the Order, i.e. 20.03.2018 is beyond 3 years of the date of default. Thus, the suit for recovery based upon a cause of action even if it is within limitation, it cannot in any manner impact the separate and independent remedy of a winding-up proceeding. A suit for recovery is a separate and independent proceeding distinct from the remedy of winding-up and therefore the contention of the Learned Counsel appearing for the Respondents/ Financial Creditor that the period spent while pursuing SARFAESI Proceedings should extend the period of limitation, cannot be sustained, as the intent of the Court is not to give a new lease of life to the debt which is already time barred. The Application preferred by Respondent under Section 7 of the ‘I&B Code’ is dismissed.
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