TMI Blog2020 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... dictum of law enshrined in Section 3 of the Limitation Act is loud and clear and speaks of no exception other than the situations covered under Sections 4 to 24 thereof. This is a mandatory provision of law barring a remedy qua an enforceable right and the effect is that the Creditor s remedy to recover an outstanding debt gets eclipsed though the right itself does not get extinguished. Therefore, notwithstanding the fact that the Corporate Debtor has not raised the issue of limitation and in effect abandoned the plea before the Adjudicating Authority, it is obligatory upon this Appellate Tribunal to examine the issue of limitation, determination whereof has a bearing on the claim itself. If the claim is barred by limitation, the debt will cease to be recoverable and it will not be payable in law or in fact. In such an eventuality, the Corporate Debtor cannot be held to have committed default in respect of the outstanding debt. It is manifestly clear that unless the case of a Creditor falls within the exceptions, exemptions or exclusions as noticed hereinabove or there is no acknowledgment of liability in writing on the part of the Debtor at a time when the claim was enforceabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sorabh Dahiya, Advocates, Mr. Vikram Hegde, Advocate JUDGMENT BANSI LAL BHAT, J. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as I B Code ) filed by the Financial Creditor Punjab National Bank came to be admitted at the hands of the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench by virtue of order dated 27th November, 2018 with appointment of Interim Resolution Professional and slapping of directions in the nature of moratorium against NRC Limited (Corporate Debtor) as a necessary sequel to the order of admission of the application. Aggrieved thereof, the Appellant Gouri Prasad Goenka - Ex-Chairman of the Corporate Debtor, who also appears to have filed I.A. No.1277/MB/2018 seeking intervention in the Company Petition (IB) 1886/MB/2018 filed by the Financial Creditor, has assailed the impugned order of admission on several grounds incorporated in the Memo of Appeal, relevant whereof may be described as relating to existence of default, quantification of debt and default, rectification of defects, competence of the person triggering the Corporate Insolvency Resolution Process and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. However, it emanates from the impugned order that the plea was not pressed at the hearing of the application at the admission stage. 4. Heard learned counsel for the parties and perused the record. 5. It is contended on behalf of Appellant that the impugned order has been passed overlooking the fact that the Corporate Debtor had been operating as a going concern for almost six decades with approximately 5000 employees on its rolls. It is submitted that the Financial Creditor Punjab National Bank had been appointed as the operating agency under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) for revival of the Corporate Debtor and negotiations with respect to rehabilitation scheme/ revival proposal/ OTS were in fact pending when the Financial Creditor filed application for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. It is further submitted that the Financial Creditor enjoys a sum of ₹ 41.21 Crores in a non-lien account held by it for the benefit of Corporate Debtor and its stakeholders which was not even disclosed before the Adjudicating Authority. It is submitted further that the Financial Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , although limitation has not been set up as a defence. 7. The dictum of law enshrined in Section 3 of the Limitation Act is loud and clear and speaks of no exception other than the situations covered under Sections 4 to 24 thereof. This is a mandatory provision of law barring a remedy qua an enforceable right and the effect is that the Creditor s remedy to recover an outstanding debt gets eclipsed though the right itself does not get extinguished. Therefore, notwithstanding the fact that the Corporate Debtor has not raised the issue of limitation and in effect abandoned the plea before the Adjudicating Authority, it is obligatory upon this Appellate Tribunal to examine the issue of limitation, determination whereof has a bearing on the claim itself. If the claim is barred by limitation, the debt will cease to be recoverable and it will not be payable in law or in fact. In such an eventuality, the Corporate Debtor cannot be held to have committed default in respect of the outstanding debt. 8. The legal proposition that the exceptions to the issue of limitation include the legal exceptions, exemptions, legal disabilities, exclusion of time of proceeding bonafide before a wro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought under the purview of SICA and declared as Sick Industrial Unit as reflected in BIFR Order dated 16th July, 2009 which passed direction under Section 22(1) of SICA to Secured Creditors not to take any coercive action against the Corporate Debtor without prior permission of BIFR. Section 22(1), inter alia, provides that no suit for the recovery of money or for the enforcement of any security against the Industrial Company or any guarantee in respect of any loans or advance granted to the Industrial Company shall lie or be proceeded with further except with the consent of the Board or, as the case may be, the Appellate Authority. Section 22(5) of SICA providing for suspension of legal proceedings which is attracted to the case of a company declared as Sick Industrial Unit, is reproduced hereunder:- 5. In computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded On a plain reading of these provisions it is manifestly clear that the remedy for the enforcement of right by the Creditor to recover the out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned order that the Corporate Debtor was ready to settle the dispute for a sum of ₹ 31 Crores on the basis of value of the security held by the Financial Creditor. This offer, reflected in para 15 of the impugned order, was not entertained having regard for the fact that the previous OTS proposal approximately to the tune of ₹ 51 Crores had already been rejected by the Financial Creditor. Viewed in this context, it is manifestly clear that the financial debt in respect whereof default was committed by the Corporate Debtor, was not barred by limitation. Contention raised on this score is accordingly rejected. 11. Some feeble attempt was made by learned counsel for the Appellant to impress upon this Appellate Tribunal that the application under Section 7 was incomplete and despite orders of Adjudicating Authority same was not completed/ amended/ rectified. Learned counsel for Appellant also tried to emphasise that the application was not filed by duly authorized person. Some more technical issues were raised. We have considered these aspects and it is noticed that the Adjudicating Authority has taken every relevant factor into consideration. It found that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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