TMI Blog2020 (1) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... ank declared the account as NPA on 29th September, 2015. Therefore, the application filed under Section 7 of the I B Code by the Bank is barred by limitation - the application under Section 7 of the I B Code was filed for the purpose of execution of the Decree passed by the Debts Recovery Tribunal in favour of the Financial Creditor for the purpose other than for the resolution of insolvency, or liquidation and is covered by Section 65. The application under Section 7 of the I B code filed by the Bank of India Limited. is dismissed - Corporate Debtor Poonam Drums and Containers Private Limited is released from the rigor of the Corporate Insolvency Resolution Process - matter is remitted to the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench to decide the fee and cost of the Corporate Insolvency Resolution Process as incurred by the Resolution Professional, which is to be borne and paid by the Bank of India Limited. - Company Appeal (AT) (Insolvency) No. 1092 of 2019 - - - Dated:- 19-12-2019 - Justice S. J. Mukhopadhaya Chairperson, Justice Bansi Lal Bhat Member (Judicial) And Justice Venugopal M. Member (Judicial) For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation.-For the purposes of this section,- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right; (b) the word signed means signed either personally or by an agent duly authorised in this behalf; and (c) an application for the execution of a decree or order shall not be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been to give a new lease of life to debts which are time-barred. It is settled law that when a debt is barred by time, the right to a remedy is time-barred. This requires being read with the definition of debt and claim in the Code. Further, debts in winding up proceedings cannot be time-barred, 3 and there appears to be no rationale to exclude the extension of this principle of law to the Code. 28.2 Further, non-application of the law on limitation creates the following problems: first, it re-opens the right of financial and operational creditors holding time-barred debts under the Limitation Act to file for CIRP, the trigger for which is default on a debt above INR one lakh. The purpose of the law of limitation is to prevent disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or latches 4. Though the Code is not a debt recovery law, the trigger being default in payment of debt renders the exclusion of the law of limitation counter-intuitive. Second, it re-opens the right of claimants (pursuant to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the negative. That being so, the existence of the suit cannot be construed as having either revived the period of limitation or extended it. It only means that those proceedings are pending but it does not give the party a legal right to institute any other proceedings on that basis. It is well settled law that the limitation is extended only in certain limited situations and that the existence of a suit is not necessarily one of them. In this view of the matter, the second point will have to be answered in favour of the respondents and it will have to be held that there was no enforceable claim in the year 1995, when the present petition was instituted. 14. Likewise, a Single Judge of the Patna High Court in Ferro Alloys Corporation Ltd. v. Rajhans Steel Ltd., (2000) Comp Cas 426 also held: 12 . In my opinion, the contention lacks merit. Simply because a suit for realisation of the debt of the petitioner-company against opposite party No. 1 was instituted in the Calcutta High Court on its original side, such institution of the suit and the pendency thereof in that court cannot ensure for the benefit of the present windin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal under Section 19 of the Act of 1993 to invoke the provisions of the Act of 2002. Rather the secured creditor is proceeding, independent of its right to proceed under the Act of 1993, while invoking the provisions of the Act of 2002. This choice of the secured creditor to invoke the Act of 2002 is independent of and despite the pendency of the proceedings under the Act of 1993, has to be looked at from the perspective of whether or not such an action meets the requirement of Section 36 of the Act of 2002, when the secured creditor is proposing to take a measure under Section 13(4) of the Act of 2002. Although, a secured creditor, as held in Transcore (supra), is entitled to take a remedy or a measure as available in the Act of 2002, despite the pendency of other proceedings, including a proceeding under Section 19 of the Act of 1993, in respect of the self-same cause of action, in my view, the invocation of such independent right under the Act of 2002, has to be done within the period of limitation prescribed under the Limitation Act, 1963 in terms of Section 36 of the Act of 2002. The Act of 2002 gives an independent right to a secured creditor to procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of India assigned the debt to Asset Reconstruction Company (India) Limited on 28th March, 2014, the Debts Recovery Tribunal vide judgment dated 10th June 2016 held that the waiver was not maintainable. In the said case, this Appellate Tribunal by its judgment held that the limitation for application under Section 7 will be counted only from 1st December, 2016, which is the date on which the I B Code brought into force. The Appellate Tribunal noted the NCLT Decision that the limitation period for suit was 12 years, there being a mortgage. However, Hon ble Supreme Court taking into consideration the judgment in B.K. Education Services Private Limited vs. Parag Gupta and Associates - 2018 SCC OnLine SC 1921 held that the limitation started from the date of default, i.e., 21st July, 2011 when the account was declared NPA. 10. Admittedly, the Corporate Debtor defaulted in making payments on 11th June, 2015 and the Dena Bank declared the account as NPA on 29th September, 2015. Therefore, we hold that the application filed under Section 7 of the I B Code by the Bank is barred by limitation. 11. The aforesaid facts also suggest that the applicati ..... 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