TMI Blog2021 (1) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in the event of the Appellant being aggrieved of the order of admission passed under Section 7, it shall be open to the Appellant to raise all issues in appeal. As regards the allegation that no demand notice has been issued by the Applicant as mandated under Section 8 of the Code, it does not hold ground for the reason that the Application has been filed by the Financial Creditor for recovery of money borrowed as Inter Corporate Deposit by the Corporate Debtor against payment of interest. In terms of clause (a) Sub-Section (8) of Section 5 of the I B Code, the same tantamount to a debt disbursed against consideration of time value of money, which falls within the ambit of Financial Debt . This Bench is of the view that the provisions of Limitation Act do apply while implementing the provisions of Insolvency Code. Since it is clear that there is an acknowledgement in the records of the Financial Creditor, the Limitation Act are to be examined in the light of the facts and circumstances of this particular case. In the present case, the true extract of statement of accounts maintained by the Financial Creditor clearly depicts that the period of non-payment is from Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewed. It is further stated that the Vice-President and Secretary of TGBL issued a letter dated 28.01.2011 admitting that the Trade Advance Agreement was converted into a short-term borrowing in the form of an Inter Corporate Deposit( ICD') and after the maturity of the ICD, the same was renewed twice and thereafter no renewal was made. Therefore, in the absence of an acknowledgement of debt by KAL after 30.06.2014 any demand made regarding the said amount is barred by limitation after a period of three years from 30.06.2014. It is also stated that no document has been produced by the Applicant to the contrary in the present application. This application has been filed on 01.11.2019 after a lapse of more than 5 years. 3. The applicant further submitted that a Tripartite Agreement was executed on 05.09.2014 between Tata Global Beverages Limited, Kerala Ayurveda Limited and Arudrama Developments Private Limited whereby Arudrama Developments Private Limited guaranteed the payment of the ICD of ₹ 5 Crores subject to the terms and conditions mentioned therein and the, the guarantor unconditionally and irrevocably guaranteed payment to Tata Global Beverages Limited of all deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the claim made by the Financial Creditor against the KAL is barred by limitation. 5. The applicant further stated that the Hon'ble Supreme Court in Mobilox Innovations Private Ltd v Kirusa Software Private Ltd reported in (2018)1SCC 353 held that the adjudication authority when examining an application under Section 9 of the Act will have to determine: (i) whether there is an operational debt ? (ii) whether the documentary evidence furnished with the application shows that the aforesaid debt is payable and has not yet been paid? (iii) whether there is an existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceedings filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application is to be rejected. The Hon'ble Supreme Court further held that the Debtor is entitled to point out to the Adjudicating Authority that the debt is not payable in law or on fact. 6. The applicant further stated that no demand notice has been issued by the Applicant as mandated under Section 8 of the Insolvency and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the respondent/ applicant in the IBA stated that the Applicant had made payment of the outstanding dues till March 2017, Further, the ICD was secured by mortgage and hence any claim for recovery by the Financial Creditor from the Corporate Debtor is not barred under law of limitation. It is submitted that under Article 62 of the Schedule to the Limitation Act, 1963, the period of limitation to enforce payment of money secured by a mortgage or otherwise charged upon immovable property is 12 years, when the money used become due. It is, therefore, clear that claim for recovery by the Financial Creditor from the Corporate Debtor is not barred under law of Limitation. Further, it is undisputed that the Corporate Debtor has made payment to the Financial Creditor under the aforesaid financial transactions till 09th March 2017 which has extended the period of limitation under Section 19 of the Limitation Act, 1963. Further, a specific admission is made by the Corporate Debtor in respect of amount of ₹ 4,25,00,000/- due to the Financial Creditor as on 31st March 2018, which clearly evidences the fact that the claim of the Financial Debtor is not barred by limitation and is a leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal. 13. As regards the allegation that no demand notice has been issued by the Applicant as mandated under Section 8 of the Code, it does not hold ground for the reason that the Application has been filed by the Financial Creditor for recovery of money borrowed as Inter Corporate Deposit by the Corporate Debtor against payment of interest. In terms of clause (a) Sub-Section (8) of Section 5 of the I B Code, the same tantamount to a debt disbursed against consideration of time value of money, which falls within the ambit of Financial Debt . 14. While the applicant was unable to repay the aforesaid ICD, a Tripartite Guarantee Agreement was entered on 05.09.2014 between M/s Arudrama Developments Private Limited ( Guarantor ), KAL ( Borrower ) and TGBL ( Lender ), whereby the Guarantor agreed to guarantee repayment of the Financial Debt to the Financial Creditor. The respondent herein accepted the guarantee offered by the Guarantor for due repayment of the ICD. The Guarantor further agreed that the guarantee shall be continuing and the guarantee and will remain in full force and effect until full repayment of the amount covered under the aforesaid ICD is made by the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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