TMI Blog2020 (9) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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. In case there is any discrepancy found in the application relating to the date of default being wrongly pleaded by the financial creditors as contended by the Corporate Debtor. The Adjudicating Authority may ask the financial Creditors to rectify the same. The limitation is a mixed question of law and facts therefore, unless it becomes apparent from the reading of the company petition that the same is barred by limitation the petition should not be rejected by selectively considering the documents on record. The application filed by the Corporate Debtor under Section 7 was required to be admitted by the Adjudicating Authority, but the Adjudicating Authority failed to consider the matter in proper perspective. Appeal allowed. - Company Appeal (AT) (Ins) No. 1448 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the default. Hence the present appeal is filled by the Financial Creditors. 3. It is stated on behalf of Financial Creditors that the Board of the Corporate Debtor vide resolution dated 25th July, 2011 resolved to borrow the term loan from Consortium Banks. The member of the Corporate Debtor vide resolution dated 22nd July, 2011 passed resolution under section 293 (1) of Companies Act, 1956 and authorized the Corporate Debtor to borrow a sum not exceeding ₹ 700 crores. The Corporate Debtor executed various loan agreements and mortgage deeds on 1st August, 2011 in favor of the members of the Consortium to secure the repayment of the loan sanctioned by the Financial Creditors and the other Consortium members. 4. It is further stated on behalf of Financial Creditors that the Corporate Debtor again approached the Financial Creditors and other Consortium members to modify/ amend/ replace certain terms and conditions in the common loan agreement and the Financial Creditors and other members of Consortium Company Appeal (AT) (Insolvency) No.1448 of 2019 agreed for modifications and accordingly the following documents were executed. i. First Amendment Agreement 28th Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amendment Agreement whereby, the Financial Creditors were constrained to issue notice of default date 7th December, 2017 demanding the payment of the total overdues. 8. It is further contended by the Learned counsel of Financial Creditors that the Financial Creditors along with other lenders have filed an Original Application (OA) being number 478/2018 before the Debt Recovery Tribunal- II, Chennai for the recovery of sum of ₹ 750,60,918.63.51/- and the same is pending before Debt Recovery Tribunal- II, Chennai. 9. It is further stated on behalf of Financial Creditors that they filed an application under section 7 of Insolvency and Bankruptcy Code, 2016 on 19th September, 2018 before the Adjudicating Authority which was dismissed by Company Appeal (AT) (Insolvency) No.1448 of 2019 the Adjudicating Authority on the ground that the application is barred by limitation through Impugned Order dated 30th October, 2019. 10. It is further stated on behalf of the Financial Creditors that the Financial creditors and the Corporate Debtor executed a revival letter dated 31st January, 2017 as per the terms of the section 18 of the Limitation Act and the same was not considered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was leased to NOCL was about 1647.34 acres. An extent of 322.401 acres was sub-leased by NOCL on 18th October, 2012 to the Corporate Debtor for 20 years with prior consent of SIPCOT. Company Appeal (AT) (Insolvency) No.1448 of 2019 14. The Learned Counsel for the financial creditors also submits that NOCL had failed to adhere to the terms of TSA whereby an event of default on the part of NOCL occurred. Thereafter, one of the operational creditor of NOCL filed an application before NCLT, Chennai which was duly admitted and thereafter the liquidation proceeding was initiated against NOCL. The liquidator had called for bid under Section 230 of Companies Act, 2013 read with I B Code 2016 wherein one of the bidders who had shown interest to take over the assets of the NOCL was Haldia Petrochemicals Ltd. (HPL). HPL put a condition that the entire lease land of NOCL including the land sub-leased to the Corporate Debtor which was duly mortgaged to the financial creditors should also be included in the scheme of arrangement and refused to pay the financial creditors and other consortium members who had advanced the credit facilities to Corporate Debtor. 15.It is further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LTD. V. Paras Gupta Company Appeal (AT) (Insolvency) No.1448 of 2019 Associates (2019) 11 SCC 633 is squarely applicable to this case. The ration laid down is captured in para 27 of the Judgment. \ Para 27 - It is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. The right to sue , therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, Section 5 of the Limitation Act may be applied to condone the delay in filing such application. 23. The Corporate Debtor also referred to the Judgment Babulal Vardharji Gurjar V. Veer Gurjar Aluminium Industries Pvt. Ltd. Anr, in Civil Appeal No. 6347/2019 and states that it had been held by the Hon'ble Supreme Court that I B Code is not a mere money recovery legislature for creditors. The scheme of the code is such that it is triggered on the determination of default and not on an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total BOI SBI Canara CBI Quarter ending 641.85 198.00 197.00 148.00 98.85 Dec- 15 16.05 4.95 4.93 3.70 2.47 Mar- 16 16.05 4.95 4.93 3.70 2.47 Jun-16 16.05 4.95 4.93 3.70 2.47 Sep-16 16.05 4.95 4.93 3.70 2.47 Company Appeal (AT) (Insolvency) No.1448 of 2019 Dec-16 16.05 4.95 4.93 3.70 2.47 Mar-17 16.05 4.95 4.93 3.70 2.47 Jun-17 16.05 4.95 4.93 3.70 2.47 Sep-17 16.05 4.95 4.93 3.70 2.47 Dec-17 16.05 4.95 4.93 3.70 2.47 Mar-18 16.05 4.95 4.93 3.70 2.47 Jun-18 16.05 4.95 4.93 3.70 2.47 Sep-18 16.05 4.95 4.93 3.70 2.47 Dec-18 16.05 4.95 4.93 3.70 2.47 Mar-19 16.05 4.95 4.93 3.70 2.47 Jun-19 16.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot applicable to the facts and circumstances of the present case since the application was filled before the Adjudicating Authority within the limitation period i.e. three years from the date of default. 29.In case there is any discrepancy found in the application relating to the date of default being wrongly pleaded by the financial creditors as contended by the Corporate Debtor. The Adjudicating Authority may ask the financial Creditors to rectify the same. The limitation is a mixed question of law and facts therefore, unless it becomes apparent from the reading of the company petition that the same is barred by limitation the petition should not be rejected by selectively considering the documents on record. We are of the view that the application filed by the Corporate Debtor under Section 7 was required to be admitted by the Adjudicating Authority, but the Adjudicating Authority failed to consider the matter in proper perspective. 30.In light of the above observations the appeal is allowed and we set aside the impugned order dated 30th October, 2019 passed by National Company Law Tribunal, Hyderabad. Company Appeal (AT) (Insolvency) No.1448 of 2019 31. We are furth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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