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2023 (8) TMI 482 - AT - Insolvency and BankruptcyMaintainability of application filed u/s 7 of IBC - barred by time limitation or not - Appellant contends that the Adjudicating Authority/ Tribunal had failed to appreciate that the Claim of the 1st Respondent / Petitioner / Financial Creditor was hopelessly barred by Limitation - HELD THAT - Dealing with the aspect of Reply Notice dated 19.06.2019 issued on behalf of the Corporate Debtor (for the Legal Notice dated 10.06.2019) issued by the 1st Respondent / Bank / Financial Creditor the Paragraph 2 of the said Reply makes a reference to the Financial Turmoil faced by the Corporate Debtor in the recent past resulting to Non payment of Loan Amount and the discussion both had with O.T.S. Proposal for Fourteen Cr. which was under due consideration etc. - an admission is the best peace of evidence which can be used against the Maker and this can be taken advantage of by a Party which places reliance so as to bind the said Maker. This Tribunal to point out an admission is not a self serving statement but it is a self harming one. An Admission is Confession or Voluntary Acknowledgement made by a Party or Someone identified with him in legal interest of the existence of certain facts which are in issue or relevant to an issue in the case as per decision - It cannot be forgotten that the Corporate Debtor had acknowledged the Debt by offering One Time Settlement Proposal for Rs.14 Crore through a Letter dated 03.03.2018. Also that the OTS Letters (sent by the Corporate Debtor ) 13.07.2021 03.08.2021 31.12.2021 04.01.2022 and 13.01.2022 were rejected by the 1st Respondent / Bank / Financial Creditor as not Financially viable. An Unconditional Acknowledgment is held to imply a promise to pay as per decision of the Hon ble Supreme Court of India in Hiralal Ors. Badkulal 1953 (3) TMI 36 - SUPREME COURT . An Acknowledgement extends the Limitation Period. No wonder an Acknowledgement contained in the Balance Sheet of the Company begins a fresh commencing point of Limitation - Undoubtedly if any documents is executed during the subsistence of Limitation thereby the Dues are / were acknowledged the Limitation will be revived afresh from the Date of Acknowledgement. In the instant case the Default committed by the Corporate Debtor in respect of the Financial Debt is more than Threshold Limit of Rs. 1 Crore (vide Section 4 of the Code after amendment) - In the present case as on date for the Loan Facilities provided by the 1st Respondent / Bank to the Corporate Debtor a Sum of Rs.239, 51, 53, 055.83/- being the Due Default Amount committed by the Corporate Debtor. If there is any Financial Debt and Default in repayment of the same by the Corporate Debtor then an Adjudicating Authority/ Tribunal by exercising its Discretion after subjectively satisfying itself that a Default was committed by the Corporate Debtor then the Section 7 Application filed by the Financial Creditor can be admitted under the I B Code 2016. In the instant case on hand the Adjudicating Authority / Tribunal on the available materials on record came to an ultimate conclusion that the Corporate Debtor had committed Default in respect of the Debt to be paid by it to and in favour of the 1st Respondent / Bank. Indeed the Section 7 Application was admitted by the Adjudicating Authority / Tribunal through its impugned order dated 06.05.2022 and appointed an Interim Resolution Professional and declared Moratorium etc. which is free from any Legal Infirmities. Appeal dismissed.
Issues Involved:
1. Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation. 2. Whether the Corporate Debtor's acknowledgment of debt extended the limitation period. 3. Whether the adjudicating authority properly admitted the application for Corporate Insolvency Resolution Process (CIRP). Summary: 1. Limitation Issue: The Appellant contended that the claim under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I & B Code) was barred by limitation, as the period of three years for filing the claim lapsed on 10.06.2009, while the application was filed on 29.02.2020. The Appellant argued that the default occurred on 11.06.2006, and the claim was time-barred. 2. Acknowledgment of Debt: The Appellant acknowledged the debt through various "One Time Settlement" (OTS) proposals and acknowledgment letters dated 30.09.2007, 30.06.2008, 01.06.2011, 20.05.2014, and 11.05.2017. The Tribunal emphasized that an acknowledgment in writing extends the limitation period, as it indicates a jural relationship between the debtor and creditor. The Appellant's acknowledgment letters were within the limitation period, thus extending the limitation. 3. Adjudication by the Authority: The Adjudicating Authority found that the Financial Creditor had provided evidence of a financial debt and default, which surpassed the threshold limit of Rs. 1 Crore. The Tribunal noted that the Corporate Debtor admitted its liability in its counter and through various communications. The Tribunal also referenced the Supreme Court's decision in Innoventive Industries Ltd. v. ICICI Bank, which held that once the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete. Conclusion: The Tribunal concluded that the Section 7 application was within the period of limitation and that the Corporate Debtor had committed a default. The application for CIRP was rightly admitted by the Adjudicating Authority, and the appeal was dismissed with no costs. The connected pending interlocutory applications were also closed.
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