TMI Blog2020 (8) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... y the 2nd Respondent/ Bank to the Corporate Debtor for recalling the facility and demanding a sum of ₹ 17,94,54,108.73/-. The Application before the Tribunal was filed on 11.12.2018. The Application was served on the Corporate Debtor vide letter dated 11.03.2019. The Section 7 Application filed by the 2nd Respondent/ Bank in the year 2018 is a belated one because of the simple reason that in the present case the declaration of NPA or default on 31.03.2004 had occurred over three years prior to the date of filing of the Application and hence, this Tribunal comes to an inescapable conclusion that the Application filed by the 2nd Respondent/ Bank (under Section 7 of the Code) before the Adjudicating Authority is hit by Limitation, as per Article 137 of the Limitation Act, 1963. This Tribunal comes to an inevitable conclusion that Application filed under Section 7 of the Code by the 2nd Respondent/ Bank before the Adjudicating Authority (NCLAT), Mumbai-II is barred by Limitation and that the Adjudicating Authority had erred in admitting the Application, which needs to be set aside by this Tribunal and accordingly this Tribunal set-aside the impugned order dated 16.12.2019, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sanction Letter dated 23.10.2002. It comes to be known that the 1st Respondent had executed demand promissory notes dated 23.10.2002, composite deed of hypothecation dated 23.10.2002. Also that on 23.03.2004, the Directors of the 2nd Respondent/ Bank had sanctioned financial credit of ₹ 14.17 crores and that the Directors had signed the documents being the demand promissory note dated 23.03.2004, composite deed of hypothecation dated 23.03.2004 for all facilities. 5 The stand of the 2nd Respondent/ Bank before the Adjudicating Authority is that the 1st Respondent Company had defaulted in respect of repayment of interest as well as the principal sum due as per repayment schedule. A recall notice dated 11.07.2007 was issued by the 2nd Respondent/ Bank to the 1st Respondent/ Company ( Corporate Debtor ) for recalling the facility and demanding a sum of ₹ 17,94,54,108.73/-. In fact, the 1st Respondent/Company was declared as Non-Performing Asset (NPA) on 31.03.2004. As on 25.07.2009, the outstanding loan was ₹ 24,93,08,873.73/-. The amount of ₹ 83,40,90,184/- was recoverable on the date of filing of an Application under Section 7 of I B Code before the Adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alance confirmation letter and it is the crystalline stand of the Appellant that there is no acknowledgement by the 1st Respondent/ Corporate Debtor/ Company after the year 2006. Hence, the Learned Counsel for the Appellant prays for allowing the Appeal and dismissing the Section 7 Application filed by 2nd Respondent Bank. 11. Conversely, it is the submission of the Learned Counsel for the 2nd Respondent/ Bank that the Bank had already credited/ appropriated in the Appellant s Loan Account the sale proceeds of Bhopal property for ₹ 224 lakhs and this aspect was not concealed by the 2nd Respondent/ Bank. 12. The Learned Counsel for the 2nd Respondent/ Bank brings it to the notice of this Tribunal that based on the Decree passed by the Debts Recovery Tribunal, Jabalpur in OA No.135 OF 2009, the Bank had claimed the loan amount and in fact a certificate amount of ₹ 24,93,08873.73/- was directed to be drawn by the Debts Recovery Tribunal against the Corporate Debtor along with interest 14.25% till realization and other charges. In fact, a total sum of ₹ 83,40,90,183/- was claimed from the 1st Respondent/ Company/ Corporate Debtor (₹ 24,93,08,874/- + intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its that the Adjudicating Authority had passed the impugned order overlooking the objections/ Reply filed by the 1st Respondent/ Company to the Application filed by the 2nd Respondent/ Bank on 28.08.2019 vide Diary No.D16269. 18. Apart from that, the Learned Counsel for the Appellant had inspected the cause list of 21.08.2019 of the Tribunal and found that on the said day no matter was listed and even in the final order, it was recorded that on the last date of hearing i.e. on 21.08.2019 none appeared on behalf of the Corporate Debtor and that the petition was heard ex-parte qua the Appellant and the 1st Respondent. 19. It is to be relevantly pointed out that under Article 62 of the Limitation Act, 1963 the period for enforcing payment of money secured by mortgage or otherwise charged upon immovable property is 12 years and the period would start running when the money suit becomes due. In order to maintain an Application under Section 7 of the Code, the Applicant has to prove the existence of debt, which is due from the Corporate Debtor . The Adjudicating Authority is not a Court of Law and cannot determine a money claim. It cannot be gainsaid that CIRP is not a litig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ride other Laws. At the same time, the IBC proceedings cannot be initiated based on time barred claims. Regardless of when IBC came into force, if more than three years had elapsed from the date of default, a creditor is not entitled to maintain an Application under the Code. IBC is not a litigation and that an Adjudicating Authority is not deciding a money claim or suit. In short, an Adjudicating Authority is not a Court of Law. 24. As far as the present case is concerned, the 1st Respondent/ Company Corporate Debtor s loan account was declared NPA by the 2nd Respondent on 31.03.2004. A Recall Notice dated 11.07.2007 was issued by the 2nd Respondent/ Bank to the Corporate Debtor for recalling the facility and demanding a sum of ₹ 17,94,54,108.73/-. The Application before the Tribunal was filed on 11.12.2018. The Application was served on the Corporate Debtor vide letter dated 11.03.2019. The Section 7 Application filed by the 2nd Respondent/ Bank in the year 2018 is a belated one because of the simple reason that in the present case the declaration of NPA or default on 31.03.2004 had occurred over three years prior to the date of filing of the Application and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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