TMI Blog2020 (7) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... ich we require to examine is whether debt is due and payable in law or in fact i.e. it is not barred by limitation. It is apparent that this sub-section (5) is applicable for entire Section 22 because of the expression this Section used in this sub-section. Further, this sub-section provides for automatic exclusion of the period of suspension of proceedings or remedy for the purpose of computation of limitation for the enforcement of any right, privilege, obligation or liability u/s 22(1) or by virtue of declaration in sub-section 3 of Section 22 - there are no hesitation in holding that extension of limitation based on exclusion of suspension period as prescribed in 22(5) of SICA, 1985 is applicable only to suit for recovery of money and not to an application filed u/ s 9 of IBC, 2016. In the instant case, the right to sue admittedly arose in 2004 and acknowledgement of debt was made on 11.01.2005. Application u/ s 9 of IBC, 2016 has been filed on 24.11.2017, hence, it is clearly barred by limitation. It emerges from the perusal of the Section 22(1) of SICA, 1985 is that there is exception or exit route to such automatic suspension i.e. proceedings or suit as specified u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be made only thereafter - if we exclude period from filing of reference i.e. 01.10.2005 till 20.11.2012, the time lirnit for filing a fresh suit/ application comes to an end in early 2015 itself after excluding period from 11.01.2005 till 30.09.2005. We further note consent of AAIFR has been taken in Appeal No 76 of 2014 vide order dated 17.09.2014. Even when, this date is considered, the time limit for filing of a fresh suit/ application comes to an end on 06.01.2017 if we take the period from filing of reference i.e. 01.10.2005 till such consent order of AAIFR on 17.09.2014 after excluding the period from 11.01.2005 till 30.09.2005. We again state that even assuming that such extended period is available to present application which has been filed on 24.11.2017, then also, such application is time barred as having been filed after expiry of extended period of limitation. Thus, Considering the legal aspects as well as factual matrix, we hold that in all possible situations, the application remains time barred. The Operational Creditor exited from rehabilitation process of the Corporate Debtor while such rehabilitation was under consideration of BIFR/AAIFR for the simple reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess till the repeal of such Act on 01.12.2016, hence, as per provisions of Section 22(5) of SICA, 1985, limitation period got extended as period consumed in the course of such proceedings had to be excluded in computing the limitation period. In this regard, learned counsel drew our attention to relevant portion of Section 22(5) r.w. Section 22(1) of the Act of SICA, 1985. It was also submitted that the Operational Creditor had initially lodged its claim with BIFR as creditor but due to a proposal of very huge hair-cut, it did not accept the settlement proposed thereunder. He further submitted that the Corporate Debtor had also acknowledged the debt on 11.01.2005, hence, period of limitation would start from this date as per the provisions of Section 18 of Limitation Act, 1963 though default had occurred earlier. It was further submitted that the application was filed on 24.11.2017 after repeal of the said Act on 01.12.2016, hence, considering the provisions of Section 22(5) as mentioned above, the same was well within limitation. 4. Learned counsel for the Corporate Debtor submitted that due to financial crunch, the outstanding amount could not be paid and there were serious i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther taw or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for Of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial or of any guarantee in respect of any loans or advance ranted 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. As noted, the above section provides for automatic suspension of two remedies which are otherwise available i.e. (i) no proceedings for the winding up or for execution, distress or the 7. like against any properties of the Industrial Company or for appointment of receiver in respect of property of industrial company (ii) no suit for recovery of money or for enforcement of any security against industrial company or any guarantors thereof can be instituted or proceeded with further. Thus, it is apparent that the term 'proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich resulted into the same conclusion. Thereafter, considering the fact that the issue involved in the present case relate to extension of limitation, we looked into the provisions of Limitation Act, 1963. As per Section 2 (l) of this Act, the word 'suit' does not include an Appeal or Application. Even otherwise, we are of the view that suit lies before a Court of law. Thus, we have no hesitation in holding that extension of limitation based on exclusion of suspension period as prescribed in 22(5) of SICA, 1985 is applicable only to suit for recovery of money and not to an application filed u/ s 9 of IBC, 2016. In the instant case, the right to sue admittedly arose in 2004 and acknowledgement of debt was made on 11.01.2005. Application u/ s 9 of IBC, 2016 has been filed on 24.11.2017, hence, it is clearly barred by limitation. For this view, we further find support from the observations of the Hon ble Supreme Court in the case of Gaurav Hargovindbhai Dave v/s Asset Reconstruction Company (India) Ltd. Anr. in Civil Appeal No. 4952 of 2019 vide order dated 18.09.2019 wherein distinction between suit and application has been brought out while deciding that Article 137 of Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Limitation Act, 1963. Here, we again reiterate that such extension would be available only for filing a suit for recovery of money and not an Application u/s 9 of IBC, 2016. Having stated so, now we proceed to exarnine the maintainability of this application assuming that extended period of limitation is available u/ s 22(5) of SICA, 1985. 13. In the present case, the Operational Creditor was part of scheme under consideration of BIFR and had also filed a suit no. 315/2009 on 23.03.2009 before Civil Judge, Vadodara seeking a decree for the impugned sum which is still alive as the permission to withdraw the same with a liberty to file afresh has been granted by the Civil Court vide its order dated 05.11.2019. The Applicant sought consent of BIFR by filing MA No. 603 of 2010 which was allowed by the BIFR on 20.11.2012 with the condition that decree awarded by the Civil Court will not be executed without prior approval of BIFR. The applicant also approached Appellate Authority (AAIFR) in Appeal No. 76 of 2014 for the same purpose which was disposed of by such Authority vide order dated 17.09.2014 whereby consent as provided u/ s 22(1) of SICA to the applicant to proceed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.2005. We further note consent of AAIFR has been taken in Appeal No 76 of 2014 vide order dated 17.09.2014. Even when, this date is considered, the time limit for filing of a fresh suit/ application comes to an end on 06.01.2017 if we take the period from filing of reference i.e. 01.10.2005 till such consent order of AAIFR on 17.09.2014 after excluding the period from 11.01.2005 till 30.09.2005. We again state that even assuming that such extended period is available to present application which has been filed on 24.11.2017, then also, such application is time barred as having been filed after expiry of extended period of limitation. Thus, Considering the legal aspects as well as factual matrix, we hold that in all possible situations, the application remains time barred. Accordingly, the same is dismissed as barred by limitation. 15. Having decided the matter for the aforesaid reasons, there is another aspect of the matter which we wish to put on record. The Operational Creditor exited from rehabilitation process of the Corporate Debtor while such rehabilitation was under consideration of BIFR/AAIFR for the simple reason that a substantial hair-cut had to be born. The object ..... X X X X Extracts X X X X X X X X Extracts X X X X
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