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2021 (6) TMI 208 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCHMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - time limitation - suit for recovery of money remains suspended for the period during the pendency of inquiry under Section 16, 17 or appeal under Section 25 of SICA - existence of debt and dispute or not - Applicability of principles of Res ipsa loquitur - HELD THAT:- It can be seen that the account of the Corporate Debtor was declared as NPA on 31.03.1999. The Corporate Debtor vide their letter dated 18.08.2000 have stated that the Company has become sick and referred the matter to the Board for Industrial & Financial Reconstruction (BIFR) as per Section 15(1) of SICA and the proceedings before the BIFR commenced on 09.05.2001 - the remedy for the enforcement of right by the Creditor to recover the outstanding debt from the Debtor through the medium of a suit for recovery of money remains suspended for the period during the pendency of inquiry under Section 16, 17 or appeal under Section 25 of SICA. As to the present case, the Corporate Debtor was declared as a Sick Industrial Unit by BIFR vide order dated 09.05.2001. Sick Industrial Companies (Special Provisions) Act, 1985 came to be repealed by the inception of the Insolvency and Bankruptcy Code, 2016 which was enforced with effect from 01.12.2016. Thus, it is crystal clear that on account of statutory bar, the period commencing from 09.05.2001 to 01.12.2016 stood excluded under the aforesaid provisions rendering the Financial Creditor ineligible to file for recovery of outstanding debt. Therefore, for purposes of calculating limitation, such period is required to be excluded in terms of Section 22(5) of SICA. The Corporate Debtor, by way of their letter dated 14.03.2017 has acknowledged that they have overdue Term Loan of ₹ 772 Lakh from the Financial Creditor and requested for the OTS proposal of ₹ 450 Lakh. This letter in terms of Section 18 of the Limitation Act, 1963 extends the period of limitation. Thus, the present Application which is filed before this Tribunal on 05.07.2019, by taking into consideration the reasonings, is not barred by limitation. Whether there is any debt and default being committed by the Corporate Debtor? - HELD THAT:- The letter dated 14.03.2017 written by the Corporate Debtor would operate on the maxim "Res ipsa loquitur" which means the thing which speaks for itself. Further, the letter dated 09.08.2018 wherein the Corporate Debtor has increased their OTS from ₹ 450 Lakh to ₹ 550 Lakh, which also came to be rejected by the Financial Creditor by their letter dated 06.02.2019. The sequence of all these OTS letters written by the Corporate Debtor shows that there exists a 'debt' and 'default' on the part of the Corporate Debtor - Also the default arising in the present Application is much prior to the advent of the Covid-19 pandemic hence the Corporate Debtor cannot seek shelter also under Section 10A of IBC, 2016. Application admitted - moratorium declared.
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