TMI Blog2021 (3) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there was another Balance and Security Confirmation Letter dated 03.07.2014, page 84 of the Reply, which is vehemently opposed by the Appellant Counsel on the ground that it has not been filed before the Adjudicating Authority, which would give a fresh lease of life to the debt, is unsustainable as three years has lapsed for computing the limitation as the date of filing of the Application is 10.10.2019. The other Balance and Security Confirmation Letter relied upon by the Respondent Counsel is dated 17.06.2017 which is also beyond three years of the date of NPA. The letter dated 11.06.2017 written by the Corporate Debtor seeking for request for restructuring of the existing loan has not been accepted by the Bank - this communication relied upon by the Respondent Bank is beyond the period of three years from the date of NPA and also does not fall within the provisions of Section 18 of the Limitation Act, 1963 - Further, there is nothing on record to suggest that the Appellant has acknowledged the debt within three years and has agreed to pay the debt. The matter is remitted to the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) to be listed on 5th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt amounts on 17.06.2017. 19. The present application is filed by the Applicant The debt amount of more than Rupees One Lakh and default by the Corporate Debtor has been established. The application is filed on proper Form 1 and is complete. The Application has been filed within the period of limitation. 2. Learned Counsel appearing for the Appellant contended that the Application filed by the Financial Creditor was barred by limitation; that the Petition was filed six years after the account by the Corporate Debtor was declared as NPA and was therefore barred by limitation; that a winding up Order has been passed and an Official Liquidator was appointed by the Hon ble High Court of Bombay which was not considered by the Adjudicating Authority; that the Directors were not served with a copy of the Petition; that the Company was classified as NPA on 31.03.2013 and the Petition was filed in the year 2019 after a lapse of six years and was clearly barred by limitation; that the Official Liquidator cannot handover the documents to the IRP without seeking permission of the Hon ble High Court of Bombay and sought for setting aside the Impugned Order. 3. Leaned Counsel appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within acknowledgement of debt as provided under Section 18 of the Limitation Act, 1963 and therefore the Judgement of the Hon ble Supreme Court in S. Natrajan V/s. Sama Dharman 2012 SCC OnLine Mad 2776 is squarely applicable to the facts of this case. 6. Heard both sides at length. The Contention of the Learned Counsel that the Directors were not served a copy and therefore sufficient opportunity was not given to them to present their case is untenable, in the light of the admitted position of fact that the Notice was admittedly hand delivered to the Official Liquidator who was appointed by the Hon ble High Court of Bombay on 25.01.2018; but the Corporate Debtor did not enter any appearance nor has chosen to file any Reply despite the Adjudicating Authority having given sufficient opportunities to do so. 7. It is not in dispute that the Hon ble High Court of Bombay had ordered for winding up of the Company in Company Petition No. 614 of 2015 dated 04.01.2018. The Hon ble Supreme Court in Jaipur Metals and Electricals Employees Organization (Supra) held as follows; 17. However, this does not end the matter. It is clear that Respondent No. 3 has filed a Section 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urged on behalf of the appellants and while reproducing the relevant passages from B.K. Educational Services, held that the bar of limitation was operating over the application filed by IL FS in the following words:- 12. This judgment clinches the issue in favour of the Petitioner/Appellant. With the introduction of Section 238A into the Code, the provisions of the Limitation Act apply to applications made under the Code. Winding up petitions filed before the Code came into force are now converted into petitions filed under the Code. What has, therefore, to be decided is whether the Winding up Petition, on the date that it was filed, is barred by lapse of time. If such petition is found to be time-barred, then Section 238A of the Code will not give a new lease of life to such a time-barred petition. On the facts of this case, it is clear that as the Winding up Petition was filed beyond three years from August, 2012 which is when, even according to IL FS, default in repayment had occurred, it is barred by time. (Emphasis in bold supplied) 25.3. Though with the aforesaid finding, the matter stood concluded that the petition filed by IL FS was barred by limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation Act that would be attracted to the facts of this case. He further argued that, being a commercial Code, a commercial interpretation has to be given so as to make the Code workable. 6. Having heard the learned counsel for both sides, what is apparent is that Article 62 is out of the way on the ground that it would only apply to suits. The present case being an application which is filed under Section 7, would fall only within the residuary Article 137. As rightly pointed out by learned counsel appearing on behalf of the appellant, time, therefore, begins to run on 21.07.2011, as a result of which the application filed under Section 7 would clearly be time-barred. So far as Mr Banerjee s reliance on para 7 of B.K. Educational Services Private Limited (supra), suffice it to say that the Report of the Insolvency Law Committee itself stated that the intent of the Code could not have been to give a new lease of life to debts which are already time-barred. 7. This being the case, we fail to see how this para could possibly help the case of the respondents. Further, it is not for us to interpret, commercially or otherwise, articles of the Limitation Act when it is cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g enjoyment or what may have been lost by a party's own inaction, negligence or latches . 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 counterintuitive. Second, it re-opens the right of claimants (pursuant to issuance of a public notice) to file time-barred claims with the IRP/RP, which may potentially be a part of the resolution plan. Such a resolution plan restructuring time-barred debts and claims may not be in compliance with the existing laws for the time being in force as per section 30(4) of the Code. 28.3 Given that the intent was not to package the Code as a fresh opportunity for creditors and claimants who did not exercise their remedy under existing laws within the prescribed limitation period, the Committee thought it fit to insert a specific section applying the Limitation Act to the Code. The relevant entry under the Limitation Act may be on a case to case basis. It was further noted that the Limitation Act may not apply to applications of corporate applicants, as these are initiated by the applicant for its own debts for the purpose of CIRP and are not in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant in the said Part V of the application and even in residuary Point No. 8 therein, nothing was at all stated at any place about the so called acknowledgment or any other date of default. (Emphasis Supplied) 14. In the instant case the date of default (NPA) is 31.03.2013 and the Application under Section 7 was filed on 10.10.2019. The contention of the Learned Counsel appearing for the Bank that there was another Balance and Security Confirmation Letter dated 03.07.2014, page 84 of the Reply, which is vehemently opposed by the Appellant Counsel on the ground that it has not been filed before the Adjudicating Authority, which would give a fresh lease of life to the debt, is unsustainable as three years has lapsed for computing the limitation as the date of filing of the Application is 10.10.2019. The other Balance and Security Confirmation Letter relied upon by the Respondent Counsel is dated 17.06.2017 which is also beyond three years of the date of NPA. The letter dated 11.06.2017 written by the Corporate Debtor seeking for request for restructuring of the existing loan has not been accepted by the Bank. Be that as it may, this communication relied upon by the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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