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2022 (8) TMI 880 - 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 - time limitation - HELD THAT:- In the instant case, as can be seen from the dates, the decree passed by the DRT is on 22.10.2016 and the Section 7 Application was filed within three years on 17.12.2019. Keeping in view, the ratio of the Hon’ble Apex Court in ‘Dena Bank (now Bank of Baroda)’ [2021 (8) TMI 315 - SUPREME COURT] the contention of the Learned Sr. Counsel for the Appellant that a “decree” is not a ‘‘Financial Debt’ as per Section 5(8) of the Code is untenable. The question here is not whether a decree is a ‘Financial Debt’. The issue here is whether a Recovery Certificate/decree can extend the period of Limitation which has already been answered by the Hon’ble Apex Court in ‘Dena Bank (now Bank of Baroda)’. The Hon’ble Apex Court in ‘Laxmi Pat Surana’ Vs. ‘Union Bank of India & Anr.’, [2021 (3) TMI 1179 - SUPREME COURT], has held that ‘Section 7 comes into play when the ‘Corporate Debtor’ commits default. Section 7, consciously used the expression "Default" not the date of notifying the loan amount of the Corporate Person as NPA. Further, the expression "Default" has been defined under Section 3(12) to mean non-payment of "debt" when whole or not part or instalment of the amount of debt has become ‘due and payable’ and is not paid by the Debtor or the ‘Corporate Debtor’, as the case may be’. Therefore, it is clear that what has to be seen is essentially not the date of NPA, but actually the ‘date of default’. Hence, the contention of the Learned Sr. Counsel for the Appellant that the date of NPA being 31.03.2013. The ‘date of default’ ought to have been construed as 30.06.2013 (90 days later) and therefore Application is ‘barred by Limitation’, is unsustainable. Having regard to the ratio of the Hon’ble Apex Court in ‘Asset Reconstruction Company India Ltd.’ Vs. ‘Tulip Star Hotels Ltd. and Ors.’, [2022 (8) TMI 70 - SUPREME COURT], wherein it has been stated that acknowledgement in Balance Sheets further extends the period of Limitation and has observed an application under Section 7 of the IBC would not be barred by limitation, on the ground that it had been filed beyond a period of three years from the date of declaration of the loan account of the Corporate Debtor as NPA, if there were an acknowledgement of the debt by the Corporate Debtor before expiry of the period of limitation of three years, in which case the period of limitation would get extended by a further period of three years. In the fourth CoC Meeting, the CoC Members resolved to go ahead with the Liquidation Process. The RP filed the Status Report stating that on 29.12.2020 a Liquidation Application was filed before the Adjudicating Authority, but has not yet come on board for hearing. Needless to add, the Adjudicating Authority shall proceed in accordance with law. This Tribunal is of the earnest view that the Section 7 Application filed by the Respondent/‘Financial creditor’ is well within the period of Limitation and hence this Appeal fails and is accordingly dismissed.
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