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TMI Blog2020 (9) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... einafter referred to as 'Corporate Debtor') alleging default in repayment of Financial Debts. The Adjudicating Authority rejected the application on the ground that the application is barred by limitation and was filled before it more than 3 years after the default. 2. The brief facts of the case are that the Corporate Debtor is a company incorporated under Companies Act, 1956 having its registered office at Vishakhapatnam, Andhra Pradesh. The Financial Creditors and other consortium members at the request of Corporate Debtors had sanctioned term loan limit of Rs. 641.85 Crores to design, finance, procure, supply, construct, operate and maintain 12 crude oil tank facilities and associated infrastructure Company Appeal (AT) (Insolvency) No.1448 of 2019 on Build Own Operate Transfer basis ("BOOT") and to design, finance, procure, supply, construct and maintain 60 products and intermediates tank farm facilities on Build Own Transfer basis ("BOT") and other project facilities and services and its refinery at Cuddalore, Tamil Nadu in accordance with the provision of Terminal Service Agreement ("TSA"). The Appellant No. 1 and 2 had sanctioned to the Corporate Debtor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facilities sanctioned/ to be sanctioned to the Corporate Debtor executed registered indenture of mortgage No. 14/2011 dated 2nd August, 2011 and the same was registered in Joint Sub Registrar, Cuddalore and also deposited with the Consortium lenders including the Financial Creditors and thereby created mortgage under section 58(f) of the Transfer Of Property Act and the Memorandum of Deposit of title deed was registered as document No. 4148/2012 dated 25th October, 2012 in SRO, Cuddalore. Company Appeal (AT) (Insolvency) No.1448 of 2019 7. It is contended on behalf of the Financial Creditors that the Corporate Debtor failed to repay the dues in accordance with the agreed terms and as such the Financial Creditors were constrained to initially classify the account as Non- Performing Asset (NPA) as per the prudential norms prescribed by the Reserve Bank of India. However, the Financial Creditors at the request of the Corporate Debtor restructured the account and allowed the Corporate Debtor to pay the Financial Creditors as well as the Consortium members, the outstanding dues on quarterly basis commencing from December 2015 and complete by September 2025. The Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Appellants; iii. That this Hon'ble Tribunal be pleased to pass such order or further orders or directions as this Hon'ble Tribunal may deem fit and proper Company Appeal (AT) (Insolvency) No.1448 of 2019 in the facts and circumstances of the present case and in the interest of justice. Interim Reliefs i. Pass an ad-interim ex-parte order staying the operation of the impugned order dated 30th October, 2019; ii. Pass any such other or further orders or directions as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case and in the interest of justice. 13. Learned counsel for the Appellants submits that there is an urgency in the matter. For this purpose, he filed an Application under I.A No. 1601 of 2020 and stated that the Corporate Debtor entered into Terminal Service Agreement (TSA) with Nagarjuna Oil Corporation Ltd. (NOCL) for a period of 20 years and approached the applicants and State Bank of India and Canara Bank for financial assistance for the project they would be constructing for NOCL. The applicant upon considering the viability of the project advanced a Term Loan of Rs. 641.85 Crores on various terms and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor that the Financial Creditors in order to cover its own lapses has conveniently suppressed the Company Petition it had filed itself before the Adjudicating Authority. In fact every other document has been filed except the company petition. 19.The Corporate Debtor argued that on the bare perusal of the said Company Petition which would reveal that the Financial Creditors had itself pleaded unequivocally that the date of default is 16th March, 2015. That even before the Adjudicating Authority at the time of hearing the Counsel for the Financial Creditors herein had made the same submission. 20. It is further stated by the Learned Counsel for the Corporate Debtor that the Application under section 7 of I&B Code had been filed on 25 th September, 2018 i.e. after more than 3 years of the date of default, thus the Adjudicating Authority rejected the Company Petition as having been barred by limitation. 21. It is further submitted on behalf of the Corporate Debtor that the Financial Creditors are now making completely contrary submissions and the pleadings made before the Adjudicating Authority were suppressed just in order to give an impression that the order of NCLT is flawed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority had noted the following issues and stated its observations as follows: Company Appeal (AT) (Insolvency) No.1448 of 2019 26.We have heard the learned counsel for the parties and perused the records. We are of the opinion that the main issue under the present appeal is whether the application filled before the Adjudicating Authority was barred by limitation Company Appeal (AT) (Insolvency) No.1448 of 2019 or not. We have observed that the Adjudicating Authority have considered the date of default as 16th March, 2015 but have failed to notice the revival letter dated 31st January, 2017 which clearly stipulates that for the purpose of Section 18 of Limitation Act, 1963 and in order to preclude any question being raised on limitation regarding the liability of the Corporate Debtor for the payment of outstanding amounts the liability shall remain in full force. This amounts to the acknowledgement of debt by the Corporate Debtor and the same was made before the expiry of the limitation period for filling the suit. The revival letter also fulfill the other conditions laid down under section 18 of the Limitation Act, 1963. 27.We have also gone through the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ault on 22nd December, 2017 i.e. on the expiry of 15 days from the date of default notice which was served upon the Corporate Debtor for recalling the loans. Thus the default cannot occur before the amount becomes due and payable as per the Second Amendment Agreement. Also, on entering into the Second Amendment Agreement on 31st march, 2015 the earlier Agreement shall be subsumed with the Amended Agreement and all the prior Company Appeal (AT) (Insolvency) No.1448 of 2019 defaults shall become irrelevant and the date of default shall be decided as per the Second Amendment Agreement dated 31st March, 2015. Therefore, we are of the opinion that the Adjudication Authority have wrongly considered the date of default to be 16th March, 2015 for computation of limitation period to file an application before it. 28. The principles laid down under B.K. Educational Services PVT. LTD. V. Paras Gupta & Associates and Babulal Vardharji Gurjar V. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr as referred by the Corporate Debtor under its submissions are not applicable to the facts and circumstances of the present case since the application was filled before the Adjudicating Authority within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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